Is Ford's Stock Overvalued Or Undervalued?

$Ford Motor(F.US)$ Ford’s forward PE ratio is also less than a third of its consumer discretionary sector peers, which are averaging a 30.2 forward earnings multiple.

Yet when it comes to evaluating a stock, earnings aren't everything.

The growth rate is also critical for companies that are rapidly building their bottom lines. The price-to-earnings-to-growth ratio $Public Service Enterprise Group(PEG.US)$ (PEG) is a good way to incorporate growth rates into the evaluation process. The S&P 500’s overall PEG is currently about 0.9; Ford’s PEG is 0.26, suggesting Ford is significantly undervalued after accounting for its growth.

Price-to-sales ratio is another important valuation metric, particularly for unprofitable companies and growth stocks. The S&P 500’s PS ratio is currently 3.15, well above its long-term average of 1.62. Ford’s PS ratio is a miniscule 0.48, roughly 85% lower than the S&P 500 average as a whole.

Finally, Wall Street analysts see little value in Ford stock over the next 12 months. The average analyst price target among the 20 analysts covering Ford is $17.50, suggesting 0.7% upside from current levels.