Here’s what to know beyond why Ford Motor Company (F) is a trending stock
Ford Motor Company (F) has been one of the most searched stocks on Zacks.com lately. So, you might want to consider some of the facts that could shape the stock’s performance in the short term.
Over the past month, shares of this company have returned -7.8%, compared to -9.1% for the composite Zacks S&P 500. During this period, the industry Zacks Automotive – Domestic, to which Ford belongs Motor Company, lost 2.4%. The key question now is: what could be the future direction of the title?
While press releases or rumors about a substantial change in a company’s trading outlook usually “trend” its stock and cause an immediate price change, there are always fundamental facts that ultimately dominate the take. purchase and retention decision.
Revisions to earnings estimates
At Zacks, we prioritize evaluating change in a company’s future earnings projection over anything else. This is because we believe that the present value of its future income stream is what determines the fair value of its stock.
Our analysis is primarily based on how sell-side analysts covering the stock revise their earnings estimates to reflect the latest trading trends. When a company’s earnings estimates increase, the fair value of its stock also increases. And when the fair value of a stock is higher than its current market price, investors tend to buy the stock, causing its price to rise. For this reason, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term movements in stock prices.
For the current quarter, Ford Motor Company is expected to post earnings of $0.54 per share, indicating a change of +5.9% from the prior year quarter. The Zacks consensus estimate has remained unchanged for the past 30 days.
For the current year, the consensus earnings estimate of $2.09 indicates a change of +31.5% from the prior year. Over the last 30 days, this estimate has changed by +0.1%.
For the next fiscal year, the consensus earnings estimate of $2.04 indicates a change of -2.3% from what Ford Motor Company was expected to report a year ago. Over the past month, the estimate has changed by -1.4%.
With an impressive externally audited track record, our proprietary stock rating tool – the Zacks Ranking – is a more conclusive indicator of a stock’s short-term price performance, as it effectively harnesses the power of earnings estimate revisions. . The magnitude of the recent consensus estimate change, along with three other factors related to earnings estimates, resulted in a Zacks #3 (Hold) ranking for Ford Motor Company.
The chart below shows the evolution of the company’s consensus 12-month EPS estimate:
12 month EPS
Revenue Growth Forecasts
While a company’s earnings growth is arguably the best indicator of its financial health, nothing happens if it can’t grow its revenue. It is almost impossible for a company to increase its profits without increasing its revenue for long periods of time. Therefore, knowing the potential revenue growth of a business is crucial.
In the case of Ford Motor Company, the consensus sales estimate of $38.35 billion for the current quarter indicates a year-over-year change of +15.5%. Estimates of $146.86 billion and $152.23 billion for the current and next fiscal year indicate changes of +16.4% and +3.7%, respectively.
Latest reported results and history of surprises
Ford Motor Company reported revenue of $37.91 billion last quarter, representing a year-over-year change of +57.1%. EPS of $0.68 for the same period versus $0.13 a year ago.
Compared to the Zacks consensus estimate of $32.74 billion, reported revenue is a surprise +15.8%. Surprise EPS was +58.14%.
In the past four quarters, Ford Motor Company has exceeded consensus EPS estimates twice. The company has exceeded consensus earnings estimates every time during this period.
Without considering the valuation of a stock, no investment decision can be effective. Crucial to predicting a stock’s future price performance is whether its current price accurately reflects the intrinsic value of the underlying business and the company’s growth prospects.
While comparing the current values of a company’s valuation multiples, such as the price-to-earnings (P/E) ratio, the price-to-sales (P/S) ratio, and the price-to-cash flow (P/CF) ratio , with its own historical values help determine whether its stock is fairly valued, overvalued or undervalued, comparing the company against its peers on these metrics gives a good idea of the reasonableness of the stock price .
As part of the Zacks Style Scores system, the Zacks Value Style Score (which assesses both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on.), which helps determine whether a stock is overvalued, correctly valued, or temporarily undervalued.
Ford Motor Company is rated A on this front, indicating that it is trading at a discount to its peers. Click here to see values for some of the rating metrics that led to this rating.
The facts discussed here and much more information on Zacks.com might help determine whether it’s worth paying attention to the market buzz about Ford Motor Company. However, its No. 3 Zacks ranking suggests it could perform in line with the broader market in the near term.
Zacks names ‘only one best choice for doubling up’
From thousands of stocks, 5 Zacks experts have each picked their favorite to skyrocket by +100% or more in the coming months. Of these 5, Research Director Sheraz Mian selects one to have the most explosive advantage of all.
It’s a little-known chemical company that’s up 65% year-on-year, but still very cheap. With relentless demand, rising earnings estimates for 2022 and $1.5 billion for stock buybacks, retail investors could step in at any time.
This company could rival or surpass other recent Zacks stocks that are expected to double, such as Boston Beer Company which climbed +143.0% in just over 9 months and NVIDIA which jumped +175.9% in one. year. Top >>
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Ford Motor Company (F): Free Inventory Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.