OPLN vs. RACE: Which Stock Is the Better Value Option?

Investors interested in Automotive - Original Equipment stocks are likely familiar with OPENLANE (OPLN) and Ferrari (RACE). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

OPENLANE has a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that OPLN has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

OPLN currently has a forward P/E ratio of 30.21, while RACE has a forward P/E of 33.20. We also note that OPLN has a PEG ratio of 2.35. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RACE currently has a PEG ratio of 3.19.

Another notable valuation metric for OPLN is its P/B ratio of 3.35. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, RACE has a P/B of 18.32.

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

OPLN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that OPLN is likely the superior value option right now.

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

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