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NXST vs. NFLX: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors interested in Broadcast Radio and Television stocks are likely familiar with Nexstar Broadcasting Group (NXST) and Netflix (NFLX). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Right now, Nexstar Broadcasting Group is sporting a Zacks Rank of #1 (Strong Buy), while Netflix has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that NXST likely has seen a stronger improvement to its earnings outlook than NFLX has recently. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

NXST currently has a forward P/E ratio of 6.84, while NFLX has a forward P/E of 60.50. We also note that NXST has a PEG ratio of 0.68. 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 2.02.

Another notable valuation metric for NXST is its P/B ratio of 2.92. 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 21.10.

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

NXST is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that NXST is likely the superior value option right now.


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Nexstar Media Group, Inc (NXST) : Free Stock Analysis Report
 
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