Ally Financial Inc (ALLY, Financial) has experienced a notable fluctuation in its stock price recently. With a current market capitalization of $10.53 billion and a stock price of $34.91, the company has seen a 4.32% decrease over the past week. However, looking at a broader time frame, Ally Financial has gained an impressive 27.00% over the past three months. According to GuruFocus's valuation metrics, the stock is currently modestly undervalued with a GF Value of $44.13, compared to a past GF Value of $47.26. This indicates a shift from being significantly undervalued three months ago to its current state.
Understanding Ally Financial Inc
Ally Financial Inc, operating within the credit services industry, is a diversified financial services company primarily known for its auto lending services. Since its separation from General Motors in 2014, Ally Financial has grown to become one of the largest consumer auto lenders in the United States. The company's portfolio extends beyond auto loans to include auto insurance, personal and commercial loans, credit cards, and mortgage debt, as well as brokerage services. This diversification has been a key factor in the company's resilience and growth.
Profitability Insights
Ally Financial's profitability is commendable, with a Profitability Rank of 6/10. The company's Return on Equity (ROE) stands at 9.40%, outperforming 62.55% of its industry peers. Its Return on Assets (ROA) is also notable at 0.63%, surpassing 37.2% of competitors. Impressively, Ally Financial has maintained profitability for the past 10 years, a feat better than 99.81% of companies in the industry. These figures underscore the company's efficient use of equity and assets to generate profits.
Growth Trajectory
Ally Financial's growth metrics are equally impressive. The company's Growth Rank is 5/10. It has achieved a 3-Year Revenue Growth Rate per Share of 16.20%, which is higher than 72.8% of the industry. The 5-Year Revenue Growth Rate per Share is 13.70%, again outperforming 72.66% of the industry. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 1.52%, which is better than 28.57% of the industry. The company's 3-Year and 5-Year EPS without NRI Growth Rates are 5.00% and 23.60%, respectively, indicating a strong upward trend in earnings.
Notable Shareholders
Ally Financial's shareholder roster includes some prominent names, signaling confidence in the company's prospects. Leading the pack is Warren Buffett (Trades, Portfolio), holding 29,000,000 shares, which translates to a 9.61% stake in the company. Following him is Bill Nygren (Trades, Portfolio) with 13,359,100 shares, accounting for 4.43%, and Louis Moore Bacon (Trades, Portfolio) with 4,181,679 shares, representing 1.39%. The presence of these seasoned investors suggests a strong belief in Ally Financial's value proposition and future performance.
Competitive Landscape
When compared to its competitors, Ally Financial stands out in terms of market capitalization. SoFi Technologies Inc (SOFI, Financial) has a market cap of $7.03 billion, Blue Owl Capital Corp (OBDC, Financial) is valued at $5.87 billion, and Credit Acceptance Corp (CACC, Financial) has a market cap of $6.48 billion. Ally Financial's larger market cap suggests a dominant position in the credit services industry, potentially offering a more stable investment opportunity.
Conclusion
In summary, Ally Financial Inc's recent stock performance reflects a significant gain over the past three months, despite a short-term decline. The company's valuation indicates it is modestly undervalued, presenting a potential opportunity for investors. Ally Financial's strong profitability and growth prospects, combined with the confidence shown by notable shareholders, position it favorably against its competitors. As the company continues to diversify its offerings and maintain its growth trajectory, it remains an attractive option for value investors seeking stability and potential in the credit services sector.
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.
