When Should You Buy a Ford Motor Company (NYSE:F)?

Let’s talk about the popular Ford Motor Company (NYSE:F). The company’s stock saw significant share price moves over the past few months on the NYSE, rising to a high of US$18.10 and falling to a low of US$12.42. Some stock price movements can provide a better opportunity for investors to get into the stock, and potentially buy at a lower price. A question that must be answered is does Ford Motor’s current trading price of $13.50 reflect the true value of the large cap? Or is it currently undervalued, giving us a chance to buy? Let’s take a look at Ford Motor’s outlook and values ​​based on the latest financial data to see if there are any catalysts for the price swings.

Check out our latest analysis for Ford Motor

What are the opportunities at Ford Motor?

Good news, investors! Ford Motor is still cheap today according to my multiple pricing model, which compares the company’s price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this example because there isn’t enough visibility to estimate the cash flow. The stock’s current 4.69x ratio is well below the industry average of 13.86x, meaning it is trading at a lower price compared to its peers. What’s even more interesting is that Ford Motor’s stock price is quite volatile, which gives us more buying opportunities as the stock price could drop lower (or rise higher) in the future. It is based on a high beta, which is a good indicator of how much the stock is moving relative to the rest of the market.

What will the future of Ford Motor look like?

NYSE:F Revenue and Revenue Growth June 6, 2022

Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its stock. While value investors would argue that it is intrinsic value relative to price that matters most, the more compelling investment thesis is that it has high growth potential at a low price. Although in the case of Ford Motor, it is expected to deliver negative revenue growth of -19%, which does not help build on its investment thesis. The risk of future uncertainty seems high, at least in the near term.

What this means for you:

Are you a shareholder? Although F is currently trading below the industry’s PE ratio, the negative outlook for negative growth carries some degree of risk. I suggest you think about whether you want to increase your portfolio’s exposure to F, or whether diversifying into other stocks might be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on F for some time, but are hesitant to make the jump, I suggest you research more about the stock. Given that the price is currently doubling, now is a good time to make a decision. But keep in mind the risks that come with future negative growth prospects.

With this in mind, if you wish to conduct further analysis of the company, it is important to know the risks involved. To help with this, we have found 3 warning signs (1 doesn’t match us!) that you should know before buying any stock in Ford Motor.

If you are no longer interested in Ford Motor, you can use our free platform to view our list of over 50 stocks with high growth potential.

This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our article is not intended as financial advice. This does not constitute a recommendation to buy or sell any stock, and does not take into account your goals, or your financial situation. We aim to provide you with long-term focused analysis driven by fundamental data. Note that our analysis may not account for price-sensitive company announcements or recent qualitative material. Simply Wall St has no positions in any of the stocks mentioned.

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