TME or ABNB: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Internet - Content sector might want to consider either Tencent Music Entertainment Group Sponsored ADR (TME) or Airbnb, Inc. (ABNB). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Tencent Music Entertainment Group Sponsored ADR and Airbnb, Inc. are sporting Zacks Ranks of #2 (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 TME has an improving earnings outlook. However, value investors will care about much more than just this.
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.
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.
TME currently has a forward P/E ratio of 13.25, while ABNB has a forward P/E of 35.75. We also note that TME has a PEG ratio of 0.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ABNB currently has a PEG ratio of 1.92.
Another notable valuation metric for TME is its P/B ratio of 1.68. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ABNB has a P/B of 13.78.
Based on these metrics and many more, TME holds a Value grade of B, while ABNB has a Value grade of D.
TME sticks out from ABNB in both our Zacks Rank and Style Scores models, so value investors will likely feel that TME is the better option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Tencent Music Entertainment Group Sponsored ADR (TME) : Free Stock Analysis Report
Airbnb, Inc. (ABNB) : Free Stock Analysis Report
