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CNK vs. ABNB: Which Stock Is the Better Value Option?
Investors interested in Leisure and Recreation Services stocks are likely familiar with Cinemark Holdings (CNK - Free Report) and Airbnb, Inc. (ABNB - 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.
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.
Currently, Cinemark Holdings has a Zacks Rank of #2 (Buy), while Airbnb, Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CNK likely has seen a stronger improvement to its earnings outlook than ABNB has recently. 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.
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.
CNK currently has a forward P/E ratio of 17.63, while ABNB has a forward P/E of 34.28. We also note that CNK has a PEG ratio of 1.76. 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. ABNB currently has a PEG ratio of 1.91.
Another notable valuation metric for CNK is its P/B ratio of 7.58. 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, ABNB has a P/B of 10.29.
These metrics, and several others, help CNK earn a Value grade of A, while ABNB has been given a Value grade of D.
CNK has seen stronger estimate revision activity and sports more attractive valuation metrics than ABNB, so it seems like value investors will conclude that CNK is the superior option right now.