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PAGS vs. ADYEY: Which Stock Is the Better Value Option?

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Investors interested in Financial Transaction Services stocks are likely familiar with PagSeguro Digital Ltd. (PAGS - Free Report) and Adyen N.V. Unsponsored ADR (ADYEY - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, PagSeguro Digital Ltd. is sporting a Zacks Rank of #1 (Strong Buy), while Adyen N.V. Unsponsored ADR has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PAGS has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

PAGS currently has a forward P/E ratio of 13.25, while ADYEY has a forward P/E of 73.38. We also note that PAGS has a PEG ratio of 1.35. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ADYEY currently has a PEG ratio of 2.82.

Another notable valuation metric for PAGS is its P/B ratio of 1.82. 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, ADYEY has a P/B of 29.05.

These metrics, and several others, help PAGS earn a Value grade of A, while ADYEY has been given a Value grade of F.

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


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PagSeguro Digital Ltd. (PAGS) - free report >>

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