ECHO vs. ZTO: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Transportation - Services sector have probably already heard of Echo Global Logistics (ECHO) and ZTO Express Cayman Inc. (ZTO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Echo Global Logistics is sporting a Zacks Rank of #2 (Buy), while ZTO Express Cayman Inc. has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ECHO 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ECHO currently has a forward P/E ratio of 12.67, while ZTO has a forward P/E of 28.89. We also note that ECHO has a PEG ratio of 0.72. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ZTO currently has a PEG ratio of 2.28.
Another notable valuation metric for ECHO is its P/B ratio of 1.79. 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, ZTO has a P/B of 2.30.
These metrics, and several others, help ECHO earn a Value grade of A, while ZTO has been given a Value grade of C.
ECHO stands above ZTO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ECHO is the superior value option right now.
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Echo Global Logistics, Inc. (ECHO) : Free Stock Analysis Report
ZTO Express Cayman Inc. (ZTO) : Free Stock Analysis Report
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