TM vs. LI: Which Stock Should Value Investors Buy Now?

Group 1 - Investors are considering Toyota Motor Corporation (TM) and Li Auto Inc. Sponsored ADR (LI) as potential undervalued stocks in the Automotive - Foreign sector [1] - Toyota has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Li Auto has a Zacks Rank of 3 (Hold) [3] - Value investors analyze various metrics to determine if a company is undervalued, including P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] Group 2 - TM has a forward P/E ratio of 8.14, significantly lower than LI's forward P/E of 20.96, suggesting TM is more undervalued [5] - TM's PEG ratio is 0.31, while LI's PEG ratio is 4.45, indicating TM's expected earnings growth is more favorable [5] - TM's P/B ratio is 1.01 compared to LI's P/B of 3.55, further supporting TM's superior valuation metrics [6]