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QNST vs. GDDY: Which Stock Is the Better Value Option?

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Investors with an interest in Internet - Delivery Services stocks have likely encountered both QuinStreet (QNST - Free Report) and GoDaddy (GDDY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, QuinStreet has a Zacks Rank of #1 (Strong Buy), while GoDaddy has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that QNST has an improving earnings outlook. But this is just one factor that value investors are interested in.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

QNST currently has a forward P/E ratio of 21.98, while GDDY has a forward P/E of 68.57. We also note that QNST has a PEG ratio of 0.88. 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. GDDY currently has a PEG ratio of 2.98.

Another notable valuation metric for QNST is its P/B ratio of 2.28. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GDDY has a P/B of 24.30.

These are just a few of the metrics contributing to QNST's Value grade of B and GDDY's Value grade of C.

QNST sticks out from GDDY in both our Zacks Rank and Style Scores models, so value investors will likely feel that QNST is the better option right now.


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QuinStreet, Inc. (QNST) - free report >>

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