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BAESY vs. EH: Which Stock Is the Better Value Option?

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Investors with an interest in Aerospace - Defense Equipment stocks have likely encountered both Bae Systems PLC (BAESY - Free Report) and EHang Holdings Limited Unsponsored ADR (EH - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Bae Systems PLC has a Zacks Rank of #2 (Buy), while EHang Holdings Limited Unsponsored ADR has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BAESY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

BAESY currently has a forward P/E ratio of 25.14, while EH has a forward P/E of 308.36. We also note that BAESY has a PEG ratio of 2.11. 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. EH currently has a PEG ratio of 7.60.

Another notable valuation metric for BAESY is its P/B ratio of 5.01. 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, EH has a P/B of 9.31.

These metrics, and several others, help BAESY earn a Value grade of B, while EH has been given a Value grade of F.

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


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