Investors interested in stocks from the Internet - Commerce sector have probably already heard of Qurate Retail (QRTEA) and TripAdvisor (TRIP). But which of these two stocks presents investors with the better value opportunity right now? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Qurate Retail and TripAdvisor are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that QRTEA is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.
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.
QRTEA currently has a forward P/E ratio of 4.92, while TRIP has a forward P/E of 21.58. We also note that QRTEA has a PEG ratio of 0.42. 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. TRIP currently has a PEG ratio of 1.27.
Another notable valuation metric for QRTEA is its P/B ratio of 0.72. 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, TRIP has a P/B of 3.57.
These are just a few of the metrics contributing to QRTEA's Value grade of A and TRIP's Value grade of C.
QRTEA 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 QRTEA is likely the superior value option right now.
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Qurate Retail Group, Inc. (QRTEA) : Free Stock Analysis Report
TripAdvisor, Inc. (TRIP) : Free Stock Analysis Report
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