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CNTY vs. ZNGA: Which Stock Is the Better Value Option?

Zacks Equity Research
Calumet Specialty Products Partners, L.P. (CLMT) closed the most recent trading day at $4.17, moving +1.21% from the previous trading session.

Investors interested in stocks from the Gaming sector have probably already heard of Century Casinos (CNTY) and Zynga (ZNGA). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Century Casinos is sporting a Zacks Rank of #2 (Buy), while Zynga has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CNTY is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

CNTY currently has a forward P/E ratio of 24.68, while ZNGA has a forward P/E of 28. We also note that CNTY has a PEG ratio of 0.99. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ZNGA currently has a PEG ratio of 1.24.

Another notable valuation metric for CNTY is its P/B ratio of 1.42. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ZNGA has a P/B of 3.12.

Based on these metrics and many more, CNTY holds a Value grade of B, while ZNGA has a Value grade of F.

CNTY has seen stronger estimate revision activity and sports more attractive valuation metrics than ZNGA, so it seems like value investors will conclude that CNTY is the superior option right now.

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Century Casinos, Inc. (CNTY) : Free Stock Analysis Report
Zynga Inc. (ZNGA) : Free Stock Analysis Report
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