Is Adient (ADNT) Stock Undervalued Right Now?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Adient (ADNT). ADNT is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.5. This compares to its industry's average Forward P/E of 18.52. Over the past year, ADNT's Forward P/E has been as high as 12.68 and as low as 4.91, with a median of 7.68.

We also note that ADNT holds a PEG ratio of 0.82. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ADNT's industry has an average PEG of 0.89 right now. Over the past 52 weeks, ADNT's PEG has been as high as 0.84 and as low as 0.22, with a median of 0.34.

Finally, investors should note that ADNT has a P/CF ratio of 19.42. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ADNT's P/CF compares to its industry's average P/CF of 27.06. Over the past 52 weeks, ADNT's P/CF has been as high as 28.08 and as low as 3.32, with a median of 5.48.

Continental (CTTAY) may be another strong Automotive - Original Equipment stock to add to your shortlist. CTTAY is a Zacks Rank of #1 (Strong Buy) stock with a Value grade of A.

Continental is currently trading with a Forward P/E ratio of 9.29 while its PEG ratio sits at 0.69. Both of the company's metrics compare favorably to its industry's average P/E of 18.52 and average PEG ratio of 0.89.

CTTAY's Forward P/E has been as high as 10.00 and as low as 6.50, with a median of 8.06. During the same time period, its PEG ratio has been as high as 0.72, as low as 0.25, with a median of 0.36.

Furthermore, Continental holds a P/B ratio of 2.82 and its industry's price-to-book ratio is 3.30. CTTAY's P/B has been as high as 2.97, as low as 0.76, with a median of 0.91 over the past 12 months.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Adient and Continental are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ADNT and CTTAY feels like a great value stock at the moment.

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

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