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EXPE vs. ZLNDY: Which Stock Should Value Investors Buy Now?

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Investors interested in Internet - Commerce stocks are likely familiar with Expedia (EXPE - Free Report) and ZALANDO SE ADRS (ZLNDY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Expedia has a Zacks Rank of #2 (Buy), while ZALANDO SE ADRS 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 EXPE has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

EXPE currently has a forward P/E ratio of 16.96, while ZLNDY has a forward P/E of 83.04. We also note that EXPE has a PEG ratio of 1.27. 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. ZLNDY currently has a PEG ratio of 8.30.

Another notable valuation metric for EXPE is its P/B ratio of 3.14. 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, ZLNDY has a P/B of 5.34.

Based on these metrics and many more, EXPE holds a Value grade of B, while ZLNDY has a Value grade of C.

EXPE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that EXPE is likely the superior value option right now.


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