This story originally appeared on Zacks

In the latest trading session, Ally Financial (ALLY) closed at $49.91, marking a +0.91% move from the previous day. The stock outpaced the S&P 500’s daily loss of 0.41%. At the same time, the Dow lost 0.01%, and the tech-heavy Nasdaq gained 0.13%.

Coming into today, shares of the auto finance company and bank had gained 2.38% in the past month. In that same time, the Finance sector gained 4.72%, while the S&P 500 gained 2.36%.

Ally Financial will be looking to display strength as it nears its next earnings release, which is expected to be January 21, 2022. On that day, Ally Financial is projected to report earnings of $2.01 per share, which would represent year-over-year growth of 25.63%. Meanwhile, our latest consensus estimate is calling for revenue of $2.06 billion, up 4.03% from the prior-year quarter.

Any recent changes to analyst estimates for Ally Financial should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% lower. Ally Financial is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Ally Financial has a Forward P/E ratio of 6.83 right now. Its industry sports an average Forward P/E of 7.81, so we one might conclude that Ally Financial is trading at a discount comparatively.

The Financial – Consumer Loans industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 161, which puts it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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