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Should Value Investors Buy Garrett Motion (GTX) Stock?

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Garrett Motion (GTX). GTX is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 6.92, which compares to its industry's average of 18.27. GTX's Forward P/E has been as high as 10.29 and as low as 5.97, with a median of 7.16, all within the past year.

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Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GTX has a P/S ratio of 0.5. This compares to its industry's average P/S of 0.71.

Value investors will likely look at more than just these metrics, but the above data helps show that Garrett Motion is likely undervalued currently. And when considering the strength of its earnings outlook, GTX sticks out at as one of the market's strongest value stocks.

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Garrett Motion Inc. (GTX) : Free Stock Analysis Report

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