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SHYF vs. RACE: Which Stock Is the Better Value Option?

By Zacks Investment ResearchStock MarketsOct 05, 2020 11:40PM ET
www.investing.com/analysis/shyf-vs-race-which-stock-is-the-better-value-option-200540114
SHYF vs. RACE: Which Stock Is the Better Value Option?
By Zacks Investment Research   |  Oct 05, 2020 11:40PM ET
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Investors with an interest in Automotive - Original Equipment stocks have likely encountered both The Shyft Group (SHYF) and Ferrari (NYSE:RACE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, The Shyft Group has a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SHYF is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

SHYF currently has a forward P/E ratio of 16.96, while RACE has a forward P/E of 58.21. We also note that SHYF has a PEG ratio of 0.85. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RACE currently has a PEG ratio of 5.07.

Another notable valuation metric for SHYF is its P/B ratio of 3.97. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, RACE has a P/B of 22.82.

Based on these metrics and many more, SHYF holds a Value grade of B, while RACE has a Value grade of D.

SHYF has seen stronger estimate revision activity and sports more attractive valuation metrics than RACE, so it seems like value investors will conclude that SHYF is the superior option right now.


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Spartan Motors, Inc. (NASDAQ:SHYF): Free Stock Analysis Report

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SHYF vs. RACE: Which Stock Is the Better Value Option?
 

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SHYF vs. RACE: Which Stock Is the Better Value Option?

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