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XPO or ZTO: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Transportation - Services sector might want to consider either XPO Logistics (XPO - Free Report) or ZTO Express (Cayman) Inc. (ZTO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, XPO Logistics is sporting a Zacks Rank of #2 (Buy), while ZTO Express (Cayman) Inc. 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 XPO has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
XPO currently has a forward P/E ratio of 11.33, while ZTO has a forward P/E of 23.15. We also note that XPO has a PEG ratio of 0.40. 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. ZTO currently has a PEG ratio of 1.42.
Another notable valuation metric for XPO is its P/B ratio of 1.77. 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, ZTO has a P/B of 2.86.
These are just a few of the metrics contributing to XPO's Value grade of A and ZTO's Value grade of D.
XPO stands above ZTO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that XPO is the superior value option right now.
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XPO or ZTO: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Transportation - Services sector might want to consider either XPO Logistics (XPO - Free Report) or ZTO Express (Cayman) Inc. (ZTO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, XPO Logistics is sporting a Zacks Rank of #2 (Buy), while ZTO Express (Cayman) Inc. 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 XPO has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
XPO currently has a forward P/E ratio of 11.33, while ZTO has a forward P/E of 23.15. We also note that XPO has a PEG ratio of 0.40. 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. ZTO currently has a PEG ratio of 1.42.
Another notable valuation metric for XPO is its P/B ratio of 1.77. 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, ZTO has a P/B of 2.86.
These are just a few of the metrics contributing to XPO's Value grade of A and ZTO's Value grade of D.
XPO stands above ZTO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that XPO is the superior value option right now.