Investors interested in stocks from the Gaming sector have probably already heard of Churchill Downs (CHDN - Free Report) and Red Rock Resorts (RRR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Churchill Downs has a Zacks Rank of #2 (Buy), while Red Rock Resorts has a Zacks Rank of #3 (Hold) right now. This means that CHDN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CHDN currently has a forward P/E ratio of 21.80, while RRR has a forward P/E of 27.12. We also note that CHDN has a PEG ratio of 1.95. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RRR currently has a PEG ratio of 11.59.
Another notable valuation metric for CHDN is its P/B ratio of 14.17. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RRR has a P/B of 54.18.
Based on these metrics and many more, CHDN holds a Value grade of B, while RRR has a Value grade of C.
CHDN has seen stronger estimate revision activity and sports more attractive valuation metrics than RRR, so it seems like value investors will conclude that CHDN is the superior option right now.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Investors interested in stocks from the Gaming sector have probably already heard of Churchill Downs (CHDN - Free Report) and Red Rock Resorts (RRR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Churchill Downs has a Zacks Rank of #2 (Buy), while Red Rock Resorts has a Zacks Rank of #3 (Hold) right now. This means that CHDN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CHDN currently has a forward P/E ratio of 21.80, while RRR has a forward P/E of 27.12. We also note that CHDN has a PEG ratio of 1.95. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RRR currently has a PEG ratio of 11.59.
Another notable valuation metric for CHDN is its P/B ratio of 14.17. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RRR has a P/B of 54.18.
Based on these metrics and many more, CHDN holds a Value grade of B, while RRR has a Value grade of C.
CHDN has seen stronger estimate revision activity and sports more attractive valuation metrics than RRR, so it seems like value investors will conclude that CHDN is the superior option right now.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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