Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put MeetMe Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, MeetMe has a trailing twelve months PE ratio of 14.68, as you can see in the chart below:
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This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.15. If we focus on the stock’s long-term PE trend, the current level puts MeetMe’s current PE ratio above its midpoint over the past five years, with the number having trended roughly downward over the last few months. Moreover, the current level is fairly below the highs for this stock, suggesting that the stock is undervalued compared to its historical levels.
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Furthermore, the stock’s PE also compares favorably with the Zacks classified Internet Services market’s trailing twelve months PE ratio, which stands at 35.48. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
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We should also point out that MeetMe has a forward PE ratio (price relative to this year’s earnings) of just 11.59, which is a little below the current level. Hence, we could say that forward earnings estimates are roughly incorporated in the company’s current share price.
P/CF Ratio
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This ratio doesn’t take amortization and depreciation into account, so can give a more accurate picture of the financial health in a business. This is a preferred metric to some valuation investors because cash flows are (a) generally less prone to manipulation by the company’s management and (b) are less affected by variation in accounting policies between different companies.
The ratio is generally applied to find out whether a company’s stock is overpriced or underpriced with reference to its cash flows generation potential compared with its competitors. However, it is not commonly used for cross-industry comparison, as the average price to cash flow ratio varies from industry to industry.
In this case, MeetMe’s P/CF ratio of 14.19 is lower than the Zacks classified Internet Services Market average of 35.30, which indicates that the stock is somewhat undervalued in this respect.
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Broad Value Outlook
In aggregate, MeetMe currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes MeetMe a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for MeetMe is just 0.58, a level that is far lower than the industry average of 0.97. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, MEET is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though MeetMe might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘D’ and a Momentum score of ‘B’. This gives MEET a Zacks VGM score—or its overarching fundamental grade—of ‘C’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been encouraging. Both the current year and the next year has witnessed one upward estimate revision, compared to no downward revision over the last one month.
However, this has had just a small impact on the consensus estimate as the current year consensus estimate has risen by 2.6% in the past one month, while the full year estimate has inched upper by 2.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Bottom Line
MeetMe is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a robust industry rank (among the Top 31%) and a Zacks Rank #2 (Buy) instills investor confidence. Moreover, over the past two years, the Zacks Internet Services industry has outperformed the broader market, as you can see below:
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So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>
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Is MeetMe a Great Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put MeetMe Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, MeetMe has a trailing twelve months PE ratio of 14.68, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.15. If we focus on the stock’s long-term PE trend, the current level puts MeetMe’s current PE ratio above its midpoint over the past five years, with the number having trended roughly downward over the last few months. Moreover, the current level is fairly below the highs for this stock, suggesting that the stock is undervalued compared to its historical levels.
Furthermore, the stock’s PE also compares favorably with the Zacks classified Internet Services market’s trailing twelve months PE ratio, which stands at 35.48. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that MeetMe has a forward PE ratio (price relative to this year’s earnings) of just 11.59, which is a little below the current level. Hence, we could say that forward earnings estimates are roughly incorporated in the company’s current share price.
P/CF Ratio
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This ratio doesn’t take amortization and depreciation into account, so can give a more accurate picture of the financial health in a business. This is a preferred metric to some valuation investors because cash flows are (a) generally less prone to manipulation by the company’s management and (b) are less affected by variation in accounting policies between different companies.
The ratio is generally applied to find out whether a company’s stock is overpriced or underpriced with reference to its cash flows generation potential compared with its competitors. However, it is not commonly used for cross-industry comparison, as the average price to cash flow ratio varies from industry to industry.
In this case, MeetMe’s P/CF ratio of 14.19 is lower than the Zacks classified Internet Services Market average of 35.30, which indicates that the stock is somewhat undervalued in this respect.
Broad Value Outlook
In aggregate, MeetMe currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes MeetMe a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for MeetMe is just 0.58, a level that is far lower than the industry average of 0.97. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, MEET is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though MeetMe might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘D’ and a Momentum score of ‘B’. This gives MEET a Zacks VGM score—or its overarching fundamental grade—of ‘C’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been encouraging. Both the current year and the next year has witnessed one upward estimate revision, compared to no downward revision over the last one month.
However, this has had just a small impact on the consensus estimate as the current year consensus estimate has risen by 2.6% in the past one month, while the full year estimate has inched upper by 2.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
MeetMe, Inc. Price and Consensus
MeetMe, Inc. Price and Consensus | MeetMe, Inc. Quote
Bottom Line
MeetMe is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a robust industry rank (among the Top 31%) and a Zacks Rank #2 (Buy) instills investor confidence. Moreover, over the past two years, the Zacks Internet Services industry has outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>