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 14.76, 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 20.33. 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.
Further, the stock’s PE also compares favorably with the Zacks Internet Service Industry’s trailing twelve months PE ratio, which stands at 31.98. 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 12.15, so it is fair to say that a slightly more value-oriented path may be ahead for MeetMe stock in the near term too.
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 7.15 is far lower than the Zacks classified Internet Serviceindustry average of 29.32, which indicates that the stock is undervalued in this respect as well.
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 0.61, a level that is far lower than the industry average of 1.07. 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 ‘B’ and a Momentum score of ‘C’. This gives MEET a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty encouraging. Both the current quarter and the full year estimates have seen one estimate going higher and no lower for each in the past sixty days.
This has had a significant impact on the consensus estimate as the current quarter consensus estimate has risen by 25% in the past two months and the full year estimate has gone up by 9%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term
Bottom Line
MeetMe is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, it is hard to get too excited about this company overall as its sluggish industry rank (Bottom 29% out of more than 250 industries) reflects weakness in its broader factors. In fact, over the last one year, the Zacks Internet Service industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for the broader factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
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Does MeetMe (MEET) Look to be a Great Pick 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 14.76, 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 20.33. 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.
Further, the stock’s PE also compares favorably with the Zacks Internet Service Industry’s trailing twelve months PE ratio, which stands at 31.98. 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 12.15, so it is fair to say that a slightly more value-oriented path may be ahead for MeetMe stock in the near term too.
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 7.15 is far lower than the Zacks classified Internet Serviceindustry average of 29.32, which indicates that the stock is undervalued in this respect as well.
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 0.61, a level that is far lower than the industry average of 1.07. 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 ‘B’ and a Momentum score of ‘C’. This gives MEET a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty encouraging. Both the current quarter and the full year estimates have seen one estimate going higher and no lower for each in the past sixty days.
This has had a significant impact on the consensus estimate as the current quarter consensus estimate has risen by 25% in the past two months and the full year estimate has gone up by 9%. 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
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term
Bottom Line
MeetMe is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, it is hard to get too excited about this company overall as its sluggish industry rank (Bottom 29% out of more than 250 industries) reflects weakness in its broader factors. In fact, over the last one year, the Zacks Internet Service industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for the broader factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>