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Investors interested in stocks from the Internet - Software sector have probably already heard of Meet Group (MEET) and Arco Platform Limited (ARCE). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Currently, Meet Group has a Zacks Rank of #2 (Buy), while Arco Platform Limited has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MEET has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
MEET currently has a forward P/E ratio of 10.11, while ARCE has a forward P/E of 41.11. We also note that MEET has a PEG ratio of 0.42. 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. ARCE currently has a PEG ratio of 0.84.
Another notable valuation metric for MEET is its P/B ratio of 2.24. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ARCE has a P/B of 2.59.
These are just a few of the metrics contributing to MEET's Value grade of B and ARCE's Value grade of F.
MEET sticks out from ARCE in both our Zacks Rank and Style Scores models, so value investors will likely feel that MEET is the better option right now.
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Meet Group, Inc.(The) (MEET) : Free Stock Analysis Report
Arco Platform Limited (ARCE) : Free Stock Analysis Report
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