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QRTEA vs. MEDS: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors interested in Internet - Commerce stocks are likely familiar with Qurate Retail (QRTEA) and Trxade Group, Inc. (MEDS). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 and Trxade Group, Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that QRTEA likely has seen a stronger improvement to its earnings outlook than MEDS has recently. But this is just one factor that value investors are interested in.

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.

QRTEA currently has a forward P/E ratio of 4.53, while MEDS has a forward P/E of 50.08. We also note that QRTEA has a PEG ratio of 0.28. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MEDS currently has a PEG ratio of 1.67.

Another notable valuation metric for QRTEA is its P/B ratio of 0.76. 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, MEDS has a P/B of 4.86.

These metrics, and several others, help QRTEA earn a Value grade of A, while MEDS has been given a Value grade of C.

QRTEA has seen stronger estimate revision activity and sports more attractive valuation metrics than MEDS, so it seems like value investors will conclude that QRTEA is the superior option right now.


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Qurate Retail Group, Inc. (QRTEA) : Free Stock Analysis Report
 
Trxade Group, Inc. (MEDS) : Free Stock Analysis Report
 
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Zacks Investment Research