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BIDU or SHOP: Which Is the Better Value Stock Right Now?
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Investors interested in Internet - Services stocks are likely familiar with Baidu Inc. (BIDU - Free Report) and Shopify (SHOP - 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Baidu Inc. has a Zacks Rank of #1 (Strong Buy), while Shopify has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BIDU is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BIDU currently has a forward P/E ratio of 11.20, while SHOP has a forward P/E of 935.37. We also note that BIDU has a PEG ratio of 0.54. 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. SHOP currently has a PEG ratio of 70.33.
Another notable valuation metric for BIDU is its P/B ratio of 1.41. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, SHOP has a P/B of 5.53.
Based on these metrics and many more, BIDU holds a Value grade of B, while SHOP has a Value grade of D.
BIDU sticks out from SHOP in both our Zacks Rank and Style Scores models, so value investors will likely feel that BIDU is the better option right now.
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BIDU or SHOP: Which Is the Better Value Stock Right Now?
Investors interested in Internet - Services stocks are likely familiar with Baidu Inc. (BIDU - Free Report) and Shopify (SHOP - 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Baidu Inc. has a Zacks Rank of #1 (Strong Buy), while Shopify has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BIDU is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BIDU currently has a forward P/E ratio of 11.20, while SHOP has a forward P/E of 935.37. We also note that BIDU has a PEG ratio of 0.54. 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. SHOP currently has a PEG ratio of 70.33.
Another notable valuation metric for BIDU is its P/B ratio of 1.41. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, SHOP has a P/B of 5.53.
Based on these metrics and many more, BIDU holds a Value grade of B, while SHOP has a Value grade of D.
BIDU sticks out from SHOP in both our Zacks Rank and Style Scores models, so value investors will likely feel that BIDU is the better option right now.