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BABA vs. AMZN: Which Stock Is the Better Value Option?
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Investors looking for stocks in the Internet - Commerce sector might want to consider either Alibaba (BABA - Free Report) or Amazon (AMZN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Alibaba and Amazon are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that BABA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
BABA currently has a forward P/E ratio of 14.10, while AMZN has a forward P/E of 70.93. We also note that BABA has a PEG ratio of 1.59. 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. AMZN currently has a PEG ratio of 3.91.
Another notable valuation metric for BABA is its P/B ratio of 1.81. 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, AMZN has a P/B of 6.89.
These metrics, and several others, help BABA earn a Value grade of B, while AMZN has been given a Value grade of C.
BABA stands above AMZN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BABA is the superior value option right now.
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BABA vs. AMZN: Which Stock Is the Better Value Option?
Investors looking for stocks in the Internet - Commerce sector might want to consider either Alibaba (BABA - Free Report) or Amazon (AMZN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Alibaba and Amazon are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that BABA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
BABA currently has a forward P/E ratio of 14.10, while AMZN has a forward P/E of 70.93. We also note that BABA has a PEG ratio of 1.59. 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. AMZN currently has a PEG ratio of 3.91.
Another notable valuation metric for BABA is its P/B ratio of 1.81. 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, AMZN has a P/B of 6.89.
These metrics, and several others, help BABA earn a Value grade of B, while AMZN has been given a Value grade of C.
BABA stands above AMZN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BABA is the superior value option right now.