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China Automotive Systems (CAAS) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3-min read

China Automotive Systems (CAAS) closed the most recent trading day at $4.07, moving -1.21% from the previous trading session. This change lagged the S&P 500's 0.75% loss on the day. Elsewhere, the Dow lost 0.39%, while the tech-heavy Nasdaq added 0.13%.

Coming into today, shares of the auto parts supplier had gained 3.52% in the past month. In that same time, the Auto-Tires-Trucks sector lost 10.77%, while the S&P 500 gained 4.98%.

Wall Street will be looking for positivity from China Automotive Systems as it approaches its next earnings report date. The company is expected to report EPS of $0.04, up 500% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $120.56 million, up 11.39% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.40 per share and revenue of $515.59 million. These totals would mark changes of +11.11% and +3.54%, respectively, from last year.

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Any recent changes to analyst estimates for China Automotive Systems should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. China Automotive Systems is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, China Automotive Systems is holding a Forward P/E ratio of 10.3. Its industry sports an average Forward P/E of 12.3, so we one might conclude that China Automotive Systems is trading at a discount comparatively.

The Automotive - Original Equipment industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 176, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research