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NXST or NFLX: Which Is the Better Value Stock Right Now?

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Zacks Equity Research
·2 min read
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Investors interested in Broadcast Radio and Television stocks are likely familiar with Nexstar Broadcasting Group (NXST) and Netflix (NFLX). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both Nexstar Broadcasting Group and Netflix have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle 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.

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.

NXST currently has a forward P/E ratio of 6.64, while NFLX has a forward P/E of 65.32. We also note that NXST has a PEG ratio of 0.66. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NFLX currently has a PEG ratio of 2.18.

Another notable valuation metric for NXST is its P/B ratio of 2.16. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NFLX has a P/B of 21.94.

Based on these metrics and many more, NXST holds a Value grade of A, while NFLX has a Value grade of C.

Both NXST and NFLX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NXST is the superior value option right now.


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Nexstar Media Group, Inc (NXST) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
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Zacks Investment Research