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WB vs. SSTK: Which Stock Should Value Investors Buy Now?

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Investors interested in Internet - Content stocks are likely familiar with Weibo Corporation (WB - Free Report) and Shutterstock (SSTK - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Weibo Corporation is sporting a Zacks Rank of #2 (Buy), while Shutterstock has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that WB is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

WB currently has a forward P/E ratio of 14.15, while SSTK has a forward P/E of 38.76. We also note that WB has a PEG ratio of 3.43. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SSTK currently has a PEG ratio of 3.64.

Another notable valuation metric for WB is its P/B ratio of 3.03. 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, SSTK has a P/B of 9.49.

These are just a few of the metrics contributing to WB's Value grade of B and SSTK's Value grade of C.

WB has seen stronger estimate revision activity and sports more attractive valuation metrics than SSTK, so it seems like value investors will conclude that WB is the superior option right now.


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