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Is Allison Transmission Holdings (ALSN) Stock Undervalued Right Now?

Zacks Equity Research
·2-min read

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Allison Transmission Holdings (ALSN). ALSN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 9.94, which compares to its industry's average of 16.22. ALSN's Forward P/E has been as high as 10.53 and as low as 6.99, with a median of 8.33, all within the past year.

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Finally, our model also underscores that ALSN has a P/CF ratio of 8.57. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 21.63. Within the past 12 months, ALSN's P/CF has been as high as 8.84 and as low as 5.66, with a median of 6.65.

These are just a handful of the figures considered in Allison Transmission Holdings's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ALSN is an impressive value stock right now.

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Allison Transmission Holdings, Inc. (ALSN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research