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Thursday, December 3, 2020

Ally Financial Inc. (NYSE:ALLY) Stock is Plummeting, Here is Why

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Ally Financial Inc. (ALLY) shares are trading at lower $22.51 and the avg recommendation for the stock is Strong Buy. while the current analyst price target stands at $27.72.

To add more color to this target, the company’s high over the last year is $35.42 and the low is $10.22. Over the last 52 weeks, ALLY is down -26.41% while the S&P 500 is up 19.49%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, ALLY reported a profit of $1.31 billion. Ally Financial Inc. also saw revenues increase to $2.18 billion. In addition, ALLY has free cash flow of $1.16 billion as of 06-2020.

ALLY booked profit margins of 7.20%, its Return on Equity (ROE) is 4.80%, and its Return on Assets is 0.40%. All told, it is clear that, ALLY needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. ALLY has a short ratio of 1.85 and outstanding shares of 375.05M.

Company Outlook

ALLY has seen increased volume after this news and investors are putting their support behind the value proposition. Traders will also note the company’s earnings per share came in at 1.75. Investors should also keep an eye on sector updates as ALLY has historically followed its peers on positive news.

All told, Ally Financial Inc. ALLY has strung together solid data and demonstrated underlying fundamentals. At its current valuation, ALLY represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Ally Financial Inc. ALLY is now commanding a market cap of 8.51B and a float of 371.32M. ALLY is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of ALLY stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in ALLY, either long or short, and we have not been compensated for this article.

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