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PRAA vs. EEFT: Which Stock Should Value Investors Buy Now?

Zacks Equity Research

Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both PRA Group (PRAA) and Euronet Worldwide (EEFT). But which of these two stocks presents investors with the better value opportunity right now? 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, PRA Group is sporting a Zacks Rank of #2 (Buy), while Euronet Worldwide has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PRAA has an improving earnings outlook. However, value investors will care about much more than just this.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

PRAA currently has a forward P/E ratio of 20.74, while EEFT has a forward P/E of 22.37. We also note that PRAA has a PEG ratio of 0.56. 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. EEFT currently has a PEG ratio of 1.86.

Another notable valuation metric for PRAA is its P/B ratio of 1.48. 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, EEFT has a P/B of 5.89.

These are just a few of the metrics contributing to PRAA's Value grade of B and EEFT's Value grade of D.

PRAA 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 PRAA is likely the superior value option right now.


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PRA Group, Inc. (PRAA) : Free Stock Analysis Report
 
Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report
 
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Zacks Investment Research