Ally Financial Inc (ALLY, Financial) has experienced a remarkable uptick in its stock price, with a 7.69% gain over the past week and an impressive 46.31% gain over the past three months. The company's market capitalization now stands at $10.76 billion, with a current price of $35.57 per share. According to GuruFocus's GF Value, the stock is currently modestly undervalued at a GF Value of $44.14, compared to a past GF Value of $47.26. This valuation marks a shift from being significantly undervalued three months ago, indicating a positive trend in investor sentiment and market performance.
Introduction to Ally Financial Inc
Ally Financial Inc, operating within the credit services industry, is a diversified financial services company with a strong emphasis on auto lending. Since its separation from General Motors in 2014, Ally has become one of the largest consumer auto lenders in the United States. Over 70% of its loan portfolio is dedicated to consumer auto loans and dealer financing. Additionally, Ally offers a suite of financial products including auto insurance, personal and commercial loans, credit cards, and mortgage debt. The company's diversified business model also encompasses brokerage services, positioning it as a comprehensive financial services provider.
Assessing Profitability
Ally Financial's Profitability Rank stands at 5/10, reflecting a moderate level of profitability within the industry. The company's Return on Equity (ROE) is 9.40%, which is better than 62.55% of its competitors. Its Return on Assets (ROA) is 0.63%, surpassing 37.02% of its peers. Notably, Ally Financial has maintained profitability for the past 10 years, a feat better than 99.81% of its competitors, showcasing the company's consistent performance and financial stability.
Growth Trajectory of Ally Financial
The company's Growth Rank is 6/10, indicating a solid trajectory in terms of revenue and profitability. Ally Financial's 3-Year Revenue Growth Rate per Share is 16.20%, outperforming 72.6% of its competitors. Its 5-Year Revenue Growth Rate per Share is 13.70%, again better than 72.66% of competitors. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is estimated at 1.52%, which is more favorable than 27.42% of competitors. The 3-Year EPS without NRI Growth Rate stands at 5.00%, and the 5-Year EPS without NRI Growth Rate is an impressive 23.60%, both indicating robust earnings growth. The EPS Growth Rate (Future 3Y To 5Y Est) is projected at 3.70%, surpassing 36.36% of competitors, suggesting a positive outlook for future earnings.
Notable Shareholders
Ally Financial's shareholder base includes some prominent investors. Warren Buffett (Trades, Portfolio) is the leading holder with 29,000,000 shares, representing a 9.61% share percentage. Bill Nygren (Trades, Portfolio) follows with 13,359,100 shares, accounting for 4.43% of shares. Louis Moore Bacon (Trades, Portfolio) also holds a significant stake with 4,181,679 shares, equating to 1.39% of the company. The involvement of these influential investors could have a substantial impact on the company's strategic direction and performance.
Competitive Landscape
When compared to its competitors, Ally Financial holds a strong market position. SoFi Technologies Inc (SOFI, Financial) has a market cap of $7.19 billion, Blue Owl Capital Corp (OBDC, Financial) is valued at $5.87 billion, and Credit Acceptance Corp (CACC, Financial) stands at $6.68 billion. Ally's larger market cap suggests a dominant presence in the credit services industry, potentially offering a competitive edge in terms of resources and market influence.
Conclusion
In summary, Ally Financial Inc's stock performance has been robust, with significant gains in both the short and medium term. The company's current valuation indicates that it is modestly undervalued, presenting a potential opportunity for investors. Ally's profitability and growth prospects appear solid, with a consistent track record and favorable growth rates. The presence of high-profile shareholders like Warren Buffett (Trades, Portfolio) could signal confidence in the company's future. Finally, Ally's competitive market position, when compared to its peers, underscores its strength within the credit services industry. These factors collectively contribute to the positive outlook for Ally Financial Inc, making it a noteworthy consideration for value investors.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
