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Investors with an interest in Audio Video Production stocks have likely encountered both Sony (SNE) and Sonos (SONO). 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Sony and Sonos are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SNE has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
SNE currently has a forward P/E ratio of 13.44, while SONO has a forward P/E of 52.03. We also note that SNE has a PEG ratio of 1.16. 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. SONO currently has a PEG ratio of 1.66.
Another notable valuation metric for SNE is its P/B ratio of 2.56. 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, SONO has a P/B of 9.49.
Based on these metrics and many more, SNE holds a Value grade of B, while SONO has a Value grade of C.
SNE stands above SONO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SNE is the superior value option right now.
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Sony Corporation (SNE) : Free Stock Analysis Report
Sonos, Inc. (SONO) : Free Stock Analysis Report
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