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LGF.A vs. IMAX: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Film and Television Production and Distribution sector might want to consider either Lions Gate Entertainment (LGF.A - Free Report) or Imax (IMAX - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Lions Gate Entertainment has a Zacks Rank of #2 (Buy), while Imax has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that LGF.A likely has seen a stronger improvement to its earnings outlook than IMAX has recently. However, value investors will care about much more than just this.

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 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.

LGF.A currently has a forward P/E ratio of 17.06, while IMAX has a forward P/E of 186.74. We also note that LGF.A has a PEG ratio of 1.14. 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. IMAX currently has a PEG ratio of 10.67.

Another notable valuation metric for LGF.A is its P/B ratio of 1.18. 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, IMAX has a P/B of 2.27.

Based on these metrics and many more, LGF.A holds a Value grade of A, while IMAX has a Value grade of D.

LGF.A stands above IMAX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LGF.A is the superior value option right now.


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