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TV vs. NFLX: Which Stock Is the Better Value Option?

Zacks Equity Research
RLI Corp. (RLI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Investors interested in stocks from the Broadcast Radio and Television sector have probably already heard of Grupo Televisa (TV) and Netflix (NFLX). 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Grupo Televisa has a Zacks Rank of #1 (Strong Buy), while Netflix has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TV has an improving earnings outlook. 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.

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.

TV currently has a forward P/E ratio of 20.45, while NFLX has a forward P/E of 127.71. We also note that TV has a PEG ratio of 0.64. 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. NFLX currently has a PEG ratio of 4.26.

Another notable valuation metric for TV is its P/B ratio of 1.62. 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, NFLX has a P/B of 29.

Based on these metrics and many more, TV holds a Value grade of A, while NFLX has a Value grade of F.

TV stands above NFLX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TV is the superior value option right now.


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Grupo Televisa S.A. (TV) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
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