Is Ally Financial Inc. (ALLY) A Risky Investment?


Ally Financial Inc. (NYSE:ALLY) finished Thursday with a subtraction of -$0.83 to close at $26.22, a downside of -3.07 percent. An average of 5,254,240 shares of common stock have been traded in the last five days. There was a fall of -$2.46 in the past week, and it reached a new high 7 times over the past 12 months. The last 20 days have seen an average of 5,260,220 shares traded, while the 50-day average volume stands at 5,336,212.

ALLY stock has decreased by -0.79% in the last month. The company shares reached their 1-month lowest point of $24.83 on 11/09/22. With the stock rallying to its 52-week high on 01/13/22, shares of the company touched a low of $24.83 and a high of $53.83 in 52 weeks. It has reached a new high 7 times so far this year and lost -44.93% or -$21.39 in price. In spite of this, the price is down -51.29% from the 52-week high.

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Insider Transactions

ALLY stock investors should be aware that Ally Financial Inc. (ALLY) stock had its last reported insider trading activity 213 days ago on Oct 25. In this transaction, the insider spent $112,500. Chief Risk Officer, Schugel Jason E., disposed of 2,500 shares at a price of $49.21 on Mar 01. The insider now owns more than $123,025 worth of shares. Prior to that, President, Auto Finance Timmerman Douglas R. went on to Sale 2,916 shares at $49.21 each on Mar 01. An amount of $143,496 was transacted.

Valuation Metrics

Ally Financial Inc. (ALLY) has a trailing price-to-earnings (P/E) ratio of 4.43. The stock’s beta is 1.27. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.78, the price-to-book (PB) ratio at 0.80, and the price-to-cash flow ratio at 3.97.

The company has a payout ratio of 19.40%. The company’s most recent quarterly dividend payment was $0.30 a share, without any change from last year. Its latest increase dividend $0.05 reported on Tuesday January 11 2022.

Financial Health

Further, the company has a long term debt to equity ratio of 1.32 and a total debt to equity ratio of 2.36 for the quarter ending September 29. Its gross profit as reported stood at $6.74 billion compared to revenue of $8.65 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Ally Financial Inc.’s return on assets was 1.10%.

Earnings Surprise

For the three-month period that ended September 29, Ally Financial Inc. had $1.08 billion in cash and short-term investments compared to $16.63 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $272.0 million in the quarter, while revenues were shrunk -151.1%. The analyst consensus anticipated Ally Financial Inc.’s latest quarter earnings to come in at $1.7 per share, but it turned out to be $1.12, a -34.10% surprise. At the end of the quarter ending September 29, Ally Financial Inc.’s stock balance sheet showed total debt was $23.97 billion. Shareholders own equity worth $298.65 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Ally Financial Inc. (ALLY) price momentum. RSI 9-day as of the close on 17 November was 43.21%, suggesting the stock is Neutral, with historical volatility in this time frame at 87.37%.

As of today, ALLY’s price is $27.62 -8.58% or -$2.46 from its 5-day moving average. ALLY is currently trading -0.15% lower than its 20-day SMA and -24.00% lower than its 100-day SMA. However, the stock’s current price level is -21.61% below the SMA50 and -46.46% below the SMA200.

The stochastic %K and %D were 40.07% and 53.38%, respectively, and the average true range (ATR) was 1.45. With the 14-day stochastic at 27.52% and the average true range at 1.41, the RSI (14) stands at 43.77%. The stock has reached -0.17 on the 9-day MACD Oscillator while the 14-day reading was at 0.00.

Analyst Ratings

Compass Point downgraded Ally Financial Inc. (NYSE: ALLY) to a a Neutral rating in its most recent analyst report. Previously, the stock was rated as a Buy. The consensus rating for Ally Financial Inc. (ALLY) among analysts is Overweight. According to current brokerage recommendations, 2 brokerage firms advise that investors sell ALLY, while 7 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 11 others rate it as a “buy”.

What is ALLY’s price target for the next 12 months?

Analysts predict a range of price targets between $23.00 and $46.00, with a median target of $34.00. Taking a look at these predictions, the average price target given by analysts for Ally Financial Inc. (ALLY) stock is $33.32.


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