After one year under the leadership of CEO Jim Hackett, shares of Ford (NYSE:F) have stopped their slide in value that began in 2014 -- at least for now. The automaker is making some bold moves as it prepares for a technology-driven future, and now could be a good buying opportunity.

Is Ford worth the money?

First, some numbers. Based on current valuation, Ford stock looks like a good deal. Its trailing-12-month price-to-earnings ratio sits at a mere 6.0, and price to free cash flow -- which measures profits after basic operating expenses and capital expenditures are paid for -- is even lower at only 4.6. That makes this stock one of the auto industry's cheapest. General Motors, Fiat Chrysler, and Toyota Motors have price to free cash flow valuations of 20.6, 8.9, and 36.7, respectively.

The view of a country road from the driver's side window of a car. The side mirror is in the foreground, and the road and mountains are in the background.

Image source: Getty Images.

There is a reason shares are so cheap, though. The auto industry is facing headwinds after years of new car purchase increases, and profits have begun to wane. Ford's profits in particular have lagged behind competitors since 2014 as expenses have outpaced top-line growth, leading to that lower-than-average valuation. One-year forward price to earnings based on analyst expectations is 7.6, implying a decrease in profitability. Ford confirmed that, saying it expects full-year 2018 cash flow to be about the same as 2017, but adjusted earnings per share to be $1.45 to $1.70. That's 4% to 19% lower than the $1.78 made last year. 

Although revenue is ticking higher, so are expenses. That makes management's goal of cutting $11.5 billion in expenses by 2020 and reducing capital investments from $34 billion to $29 billion through 2022 so much more important. For frame of reference, operating expenses were $40.8 billion in the first quarter, an 8% annual increase and besting the 7% increase in revenue.

That creates some uncertainty surrounding Ford, but a current dividend payout of 5.4% should help make up for some grievances. Nevertheless, the real thesis behind a potential Ford stock purchase is a rebound. Besides cutting expenses, Hackett and company have a plan.

Cooking up some tech initiatives

Hackett outlined four ways Ford will transform itself and return to profit growth in the next few years. The first is product lineup -- a normal but costly process for every auto manufacturer. However, a bold step will be taken with the elimination of sedans in North America. That might make a lot of sense, as American's preferences are changing. In the car department, only the Mustang sports car and an upcoming Focus Active crossover will be left. By 2020, the estimate is that nearly 90% of sales will come from higher profit margin crossovers, SUVs, and trucks.

Second is a renewed commitment to electric vehicles. By 2022, every model in Ford's lineup (which will purportedly total 16) will have at least a hybrid option. That includes trucks, SUVs, and the Mustang. The goal will be to offer the bigger vehicles and performance that are in demand without the historical gas mileage penalty.

Initiatives three and four, autonomous vehicles and the mobility division, are closely related. These areas also pose the most risk as they are largely uncharted and money-losing territories for the industry. Ford lumps its autonomy and other tech initiatives into its mobility segment, which counted $102 million against the bottom line last quarter due to higher investment into new business. The biggest news as of late was the acquisition of technology start-ups Autonomic and Transloc to help accelerate development of smart transit and ride-hailing services.

At the core of Ford's technology ambitions, though, is the impending launch of the Transportation Mobility Cloud. In the future, the automaker sees itself as a cloud-based data provider as well as a manufacturer. The goal of Mobility Cloud is to provide an access subscription on data about the movement of people and goods to make transportation faster, safer, and more convenient. The target audience will be tech companies, municipalities and city planners, fleet operators, and even other auto manufacturers.

Ford's strong cash flow and fat trimming is what will fund these ambitions, which makes the stock an intriguing bet even though signs of a reversal haven't yet been made manifest. The company isn't alone in these various tech initiatives, which makes its turnaround a risky one. However, I like the aggressive plans Ford's new management has in store. The world is changing fast, making caution a potential liability. With ample cash to fund its aspirations and an already downbeat valuation, the stock looks like a good buy to me.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.