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SONY vs. SONO: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Audio Video Production sector have probably already heard of Sony (SONY - Free Report) and Sonos (SONO - 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Sony has a Zacks Rank of #2 (Buy), while Sonos has a Zacks Rank of #3 (Hold) right now. This means that SONY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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.

SONY currently has a forward P/E ratio of 16.36, while SONO has a forward P/E of 85.35. We also note that SONY has a PEG ratio of 2.76. 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. SONO currently has a PEG ratio of 14.61.

Another notable valuation metric for SONY is its P/B ratio of 2.26. 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, SONO has a P/B of 3.95.

Based on these metrics and many more, SONY holds a Value grade of B, while SONO has a Value grade of C.

SONY stands above SONO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SONY is the superior value option right now.


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