Making its way onto the Zacks Rank #1 (Strong Buy) list last week, Ford Motor’s (F) stock lands the Bull of the Day.Setting up a bullish pattern after moving above its 200-day moving average, Ford’s stock has now spiked +9% year to date and more upside could be ahead considering the auto giant’s lucrative valuation. 
Image Source: Zacks Investment Research Improved Probability & P/E DiscountFord had worked diligently to improve its profitability prior to the pandemic and this came to fruition once supply chain disruptions subsided with the company seeing multi-year EPS peaks of $2.01 per share last year. While a modest slowdown in the resurgence of Ford’s bottom line is expected, over the last 60 days, earnings estimate revisions are nicely up for both FY24 and FY25. 
Image Source: Zacks Investment ResearchFurthermore, higher EPS estimates support the notion that Ford’s stock is still cheap trading at $13 and just 6.9X forward earnings. This is 58% below Ford’s decade-long high of 16.5X forward earnings and a slight discount to the median of 7.3X. Even better, Ford’s stock trades at a glaring bargain to its Zacks Automotive-Domestic Industry average of 15.3X and closer to its main competitor General Motors (GM) 7.6X. 
Image Source: Zacks Investment Research
P/S Discount
In terms of price to sales, Ford’s stock checks the valuation box as well with a P/S ratio of 0.31X which is roughly on par with General Motors’ 0.29X and firmly beneath the optimum level of less than 2X. With the industry average at 1.5X sales its noteworthy that Ford’s top line is expected to slightly increase this year to $166.3 billion compared to $165.99 billion in 2023. 
Image Source: Zacks Investment Research EV SurgeMaking Ford’s perceived discounts more lucrative is that its EV sales surged 27% last quarter to record highs with a total of 25,927 all-electric vehicles delivered. Driven by increasing demand for its Mustang Mack-E, F-150 Lightening, and E-Transit, this impressively defied expectations. To that point, many analysts are expecting a significant slowdown in the broader EV market with Tesla’s (TSLA) slowing sales growth making headlines.Notably, the EV boost pushed Ford’s Q4 sales to $43.3 billion which beat estimates by 14% in early February while earnings of $0.29 per share crushed the Zacks Consensus of $0.12 a share by 141%. More astonishing, Ford said its EV sales soared 81% last month after delivering 6,368 units and this could certainly propel its Q1 resutls in April. 
Image Source: INSIDE EVs Bottom lineThe recent surge in Ford’s stock may just be getting started considering its very attractive valuation and compelling EV expansion. Certainly, now appears to be an ideal time to buy as keeping Ford’s stock in the portfolio may be very rewarding this year.More By This Author:3 Reasons Why Growth Investors Shouldn’t Overlook AbercrombieThese 2 Retail And Wholesale Stocks Could Beat Earnings: Why They Should Be On Your Radar Top Stocks To Buy For A Rebound Among Chinese Equities
