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VAC vs. ABNB: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Leisure and Recreation Services stocks have likely encountered both Marriott Vacations Worldwide (VAC - Free Report) and Airbnb, Inc. (ABNB - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 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.

Right now, Marriott Vacations Worldwide is sporting a Zacks Rank of #2 (Buy), while Airbnb, Inc. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that VAC has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

VAC currently has a forward P/E ratio of 9.62, while ABNB has a forward P/E of 28.17. We also note that VAC has a PEG ratio of 0.94. 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 2.17.

Another notable valuation metric for VAC is its P/B ratio of 0.9. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ABNB has a P/B of 9.49.

These metrics, and several others, help VAC earn a Value grade of A, while ABNB has been given a Value grade of D.

VAC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that VAC is likely the superior value option right now.


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Marriott Vacations Worldwide Corporation (VAC) - free report >>

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