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TRVG vs. GOOG: Which Stock Is the Better Value Option?

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Investors interested in Internet - Services stocks are likely familiar with Trivago N.V. ADS (TRVG - Free Report) and Alphabet Inc. (GOOG - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Trivago N.V. ADS has a Zacks Rank of #2 (Buy), while Alphabet Inc. has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that TRVG likely has seen a stronger improvement to its earnings outlook than GOOG has recently. But this is only part of the picture for value investors.

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.

TRVG currently has a forward P/E ratio of 10.94, while GOOG has a forward P/E of 18.78. We also note that TRVG has a PEG ratio of 0.76. 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. GOOG currently has a PEG ratio of 1.66.

Another notable valuation metric for TRVG is its P/B ratio of 0.71. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, GOOG has a P/B of 4.54.

These metrics, and several others, help TRVG earn a Value grade of A, while GOOG has been given a Value grade of C.

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


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