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

editorial-team@simplywallst.com (Simply Wall St)
·3 min read

Today we're going to take a look at the well-established Ford Motor Company (NYSE:F). The company's stock received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$15.35 at one point, and dropping to the lows of US$11.75. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Ford Motor's current trading price of US$12.39 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Ford Motor’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Ford Motor

Is Ford Motor Still Cheap?

The stock is currently trading at US$12.39 on the share market, which means it is overvalued by 22% compared to my intrinsic value of $10.15. This means that the opportunity to buy Ford Motor at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Ford Motor’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Ford Motor look like?

earnings-and-revenue-growth
earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Ford Motor's earnings over the next few years are expected to increase by 79%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in F’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe F should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on F for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for F, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Ford Motor as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 3 warning signs for Ford Motor (of which 1 is significant!) you should know about.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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

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