Investors looking for stocks in the Internet - Commerce sector might want to consider either Qurate Retail (QRTEA) or Amazon (AMZN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Qurate Retail has a Zacks Rank of #2 (Buy), while Amazon has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that QRTEA likely has seen a stronger improvement to its earnings outlook than AMZN has recently. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
QRTEA currently has a forward P/E ratio of 11.61, while AMZN has a forward P/E of 84.19. We also note that QRTEA has a PEG ratio of 2.39. 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. AMZN currently has a PEG ratio of 3.12.
Another notable valuation metric for QRTEA is its P/B ratio of 1.91. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, AMZN has a P/B of 20.39.
These metrics, and several others, help QRTEA earn a Value grade of A, while AMZN has been given a Value grade of F.
QRTEA sticks out from AMZN in both our Zacks Rank and Style Scores models, so value investors will likely feel that QRTEA is the better option right now.
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Qurate Retail Group, Inc. (QRTEA) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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