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

Let's talk about the popular Ford Motor Company (NYSE:F). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$11.40 at one point, and dropping to the lows of US$9.65. 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$9.78 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?

According to our valuation model, the stock is currently overvalued by about 29%, trading at US$9.78 compared to our intrinsic value of $7.59. This means that the opportunity to buy Ford Motor at a good price has disappeared! But, is there another opportunity to buy low 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.

Can we expect growth from Ford Motor?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for Ford Motor. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

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 an eye on F for a while, 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 want to dive deeper into Ford Motor, you'd also look into what risks it is currently facing. Case in point: We've spotted 4 warning signs for Ford Motor you should be mindful of and 1 of them shouldn't be ignored.

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.

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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.