TH or MTN: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Leisure and Recreation Services sector have probably already heard of Target Hospitality (TH) and Vail Resorts (MTN). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Right now, Target Hospitality is sporting a Zacks Rank of #2 (Buy), while Vail Resorts has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that TH likely has seen a stronger improvement to its earnings outlook than MTN has recently. However, value investors will care about much more than just this.
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 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.
TH currently has a forward P/E ratio of 8.98, while MTN has a forward P/E of 23.11. We also note that TH has a PEG ratio of 0.60. 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. MTN currently has a PEG ratio of 1.66.
Another notable valuation metric for TH is its P/B ratio of 5.04. 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, MTN has a P/B of 5.99.
Based on these metrics and many more, TH holds a Value grade of A, while MTN has a Value grade of C.
TH stands above MTN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TH is the superior value option right now.
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Target Hospitality Corp. (TH) : Free Stock Analysis Report
Vail Resorts, Inc. (MTN) : Free Stock Analysis Report
