Back to top

Image: Bigstock

Is Trivago (TRVG) Stock Undervalued Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Trivago (TRVG - Free Report) is a stock many investors are watching right now. TRVG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.30 right now. For comparison, its industry sports an average P/E of 18.98. TRVG's Forward P/E has been as high as 88.53 and as low as -117.57, with a median of 17.65, all within the past year.

We also note that TRVG holds a PEG ratio of 0.57. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TRVG's PEG compares to its industry's average PEG of 1.30. Within the past year, TRVG's PEG has been as high as 0.74 and as low as 0.29, with a median of 0.47.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TRVG has a P/S ratio of 0.73. This compares to its industry's average P/S of 1.35.

21Vianet Group (VNET - Free Report) may be another strong Internet - Services stock to add to your shortlist. VNET is a # 2 (Buy) stock with a Value grade of A.

Shares of 21Vianet Group are currently trading at a forward earnings multiple of -10.08 and a PEG ratio of -0.18 compared to its industry's P/E and PEG ratios of 18.98 and 1.30, respectively.

VNET's price-to-earnings ratio has been as high as 30.38 and as low as -58.95, with a median of -13.28, while its PEG ratio has been as high as 0.54 and as low as -1.15, with a median of -0.32, all within the past year.

21Vianet Group also has a P/B ratio of 0.74 compared to its industry's price-to-book ratio of 3.76. Over the past year, its P/B ratio has been as high as 2.27, as low as 0.45, with a median of 0.75.

These are only a few of the key metrics included in Trivago and 21Vianet Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, TRVG and VNET look like an impressive value stock at the moment.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Vnet Group Inc. (VNET) - free report >>

Trivago N.V. ADS (TRVG) - free report >>

Published in