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Tencent Music Entertainment Group Sponsored ADR (TME) - free report >>
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Tencent Music Entertainment Group Sponsored ADR (TME) - free report >>
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TME vs. ABNB: Which Stock Is the Better Value Option?
Investors interested in stocks from the Internet - Content sector have probably already heard of Tencent Music Entertainment Group Sponsored ADR (TME - Free Report) and Airbnb, Inc. (ABNB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Tencent Music Entertainment Group Sponsored ADR has a Zacks Rank of #2 (Buy), while Airbnb, Inc. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TME has an improving earnings outlook. But this is just one piece of the puzzle 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.
TME currently has a forward P/E ratio of 19.70, while ABNB has a forward P/E of 32.33. We also note that TME has a PEG ratio of 0.77. 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. ABNB currently has a PEG ratio of 1.56.
Another notable valuation metric for TME is its P/B ratio of 2.11. 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, ABNB has a P/B of 9.68.
These are just a few of the metrics contributing to TME's Value grade of B and ABNB's Value grade of C.
TME sticks out from ABNB in both our Zacks Rank and Style Scores models, so value investors will likely feel that TME is the better option right now.