Is Fiat Chrysler (FCAU) Stock Undervalued Right Now?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Fiat Chrysler (FCAU) is a stock many investors are watching right now. FCAU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 4.97, while its industry has an average P/E of 7.81. Over the last 12 months, FCAU's Forward P/E has been as high as 6 and as low as 3.99, with a median of 5.05.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. FCAU has a P/S ratio of 0.21. This compares to its industry's average P/S of 0.33.

Finally, our model also underscores that FCAU has a P/CF ratio of 2.22. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 4.13. Over the past year, FCAU's P/CF has been as high as 2.89 and as low as 2, with a median of 2.44.

Value investors will likely look at more than just these metrics, but the above data helps show that Fiat Chrysler is likely undervalued currently. And when considering the strength of its earnings outlook, FCAU sticks out at as one of the market's strongest value stocks.

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Fiat Chrysler Automobiles N.V. (FCAU) : Free Stock Analysis Report
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