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BABA or MELI: Which Is the Better Value Stock Right Now?
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Investors with an interest in Internet - Commerce stocks have likely encountered both Alibaba (BABA - Free Report) and MercadoLibre (MELI - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Alibaba and MercadoLibre are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
BABA currently has a forward P/E ratio of 11.86, while MELI has a forward P/E of 72.07. We also note that BABA has a PEG ratio of 0.59. 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. MELI currently has a PEG ratio of 1.64.
Another notable valuation metric for BABA is its P/B ratio of 1.62. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MELI has a P/B of 30.92.
These metrics, and several others, help BABA earn a Value grade of A, while MELI has been given a Value grade of C.
Both BABA and MELI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BABA is the superior value option right now.
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BABA or MELI: Which Is the Better Value Stock Right Now?
Investors with an interest in Internet - Commerce stocks have likely encountered both Alibaba (BABA - Free Report) and MercadoLibre (MELI - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Alibaba and MercadoLibre are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
BABA currently has a forward P/E ratio of 11.86, while MELI has a forward P/E of 72.07. We also note that BABA has a PEG ratio of 0.59. 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. MELI currently has a PEG ratio of 1.64.
Another notable valuation metric for BABA is its P/B ratio of 1.62. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MELI has a P/B of 30.92.
These metrics, and several others, help BABA earn a Value grade of A, while MELI has been given a Value grade of C.
Both BABA and MELI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BABA is the superior value option right now.