BLBD vs. TSLA: Which Stock Should Value Investors Buy Now?

Investors interested in stocks from the Automotive - Domestic sector have probably already heard of Blue Bird (BLBD) and Tesla (TSLA). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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.

Blue Bird and Tesla are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BLBD likely has seen a stronger improvement to its earnings outlook than TSLA has recently. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

BLBD currently has a forward P/E ratio of 12.61, while TSLA has a forward P/E of 185.89. We also note that BLBD has a PEG ratio of 2.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TSLA currently has a PEG ratio of 7.90.

Another notable valuation metric for BLBD is its P/B ratio of 6.69. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TSLA has a P/B of 17.49.

These are just a few of the metrics contributing to BLBD's Value grade of B and TSLA's Value grade of F.

BLBD sticks out from TSLA in both our Zacks Rank and Style Scores models, so value investors will likely feel that BLBD is the better option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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