Knowing facts before you bet on it

Toyota Motor Corporation (TM) is one of the stocks that have recently been observed by Zacks.com visitors. So it could be a good idea to check some of the factors that could influence the short -term performance of the share.

The shares of this company returned +13.4% in the past month compared to the Zacks S&P 500 Composite -0.5% changes. The Zack's automotive – foreign industry, which includes Toyota engine, has increased 5% during this period. Now the main question is: where could the inventory be directed at short notice?

Although media reports or rumors about a significant change in the business prospects of a company generally lead to the fact that its shares lead to trend and an immediate change in price, there are always certain basic factors that ultimately advance the purchase and hate decision.

Instead of concentrating on anything else, we prioritize the evaluation of the change in the profit projection of a company at Zacks. This is due to the fact that we believe that the current value for its shares is determined by the cash value of his future profit current.

Our analysis essentially is based on how the analysts of sales pages that cover the shares revises their profit estimates in order to take into account the latest business trends. If the profit estimates for a company increase, the at the time to be accompanied by the current value for its shares. And if the at the time value of a share to be added is higher than the current market price, investors tend to buy the shares, which means that the price is upwards. For this reason, empirical studies indicate a strong correlation between trends in estimating the profits and the short -term share price movements.

For the current quarter, Toyota Motor is expected to make a profit of $ 2.92 per share, which indicates a change of -41.5% compared to the previous year. The Zacks Consensus estimate has changed +0.3% in the last 30 days.

For the current financial year, the consensus estimate of $ 22.61 refers to a change of -10.8% compared to the previous year. In the past 30 days, this estimate has changed.

For the next financial year, the consensus estimate of USD 22.25 shows a change of -1.6% compared to what Toyota Motor is expected a year ago. The estimate has changed in the past month.

Our proprietary stock assessment tool, The Zacks Rank, offers a strong externally tested track record and offers a more conclusive picture of the price direction of a share at short notice, as it effectively uses the power of profits. Due to the size of the recent change in the consensus estimate and three other factors in connection with profit estimates, Toyota Motor is ranked 3 (Hold).

The following table shows the development of the company's 12-month consensus EPS EPS estimate:

12-month consensus EPS estimate for TM _12monthepschafturl

While profit growth is probably the most superior indicator of a company's financial health, nothing happens than such if a company cannot increase its income. After all, it is almost impossible for a company to increase its income over a longer period of time without increasing its income. It is therefore important to know the potential sales growth of a company.

In the case of Toyota Motor, the consensus sales estimate of $ 78.47 billion refers to a change of +5.2%compared to the previous year. The estimates of 314.06 billion US dollars and 332.37 billion US dollars for the current and next financial years show changes of +0.6% and +5.8%.

Toyota Motor reported sales of $ 81.35 billion in the last quarter, which corresponds to a change of -0.2%compared to the previous year. EPS of $ 9.98 for the same period comparable to USD 6.81 a year ago.

Compared to the Zacks Consensus estimate of 78.36 billion US dollars, the registered income is a surprise of +3.82%. The EPS surprise was +128.9%.

In the last four quarters, Toyota Motor has exceeded the consensus EEPS estimates three times. The company has achieved three times consensus sales estimates three times during this period.

Without taking into account the assessment of a share, no investment decision can be efficient. When predicting the future price performance of a share, it is crucial to determine whether the current price correctly reflects the internal value of the underlying business and the company's growth prospects.

During the comparison of the current values of the evaluation advantages of a company, such as price-to-profit (P/E), Price-to-Sales (P/S) and Price-to-Cash-Flow (P/CF), with its own historical values, to determine whether its shares are rather evaluated, overvalued or undervalued, the relative position is comparable to prices for the relative position.

As part of the ZACKS Style Scores system, the Zacks Value Style Score (which rates both traditional and unconventional valuation metrics) organizes shares in five groups that are rich from A to F (A is better than B; b is better than C; and so on).

Toyota motor is awarded this front, which indicates that it is a discount for his colleagues. Click here to display the values of some evaluation metrics that have driven this grade.

The facts discussed here and a lot of other information about Zacks.com could help determine whether it is worth paying attention to the market for the Toyota engine market or not. However, the Zacks ranked 3rd indicate that it is in line with the broader market at short notice.

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This article was originally published in Zack's Investment Research (Zacks.com).

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