Back to top

Image: Bigstock

PROSY or EBAY: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Internet - Commerce stocks are likely familiar with Prosus N.V. Sponsored ADR (PROSY - Free Report) and eBay (EBAY - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, Prosus N.V. Sponsored ADR has a Zacks Rank of #2 (Buy), while eBay has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PROSY likely has seen a stronger improvement to its earnings outlook than EBAY 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.

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.

PROSY currently has a forward P/E ratio of 2.91, while EBAY has a forward P/E of 15.25. We also note that PROSY has a PEG ratio of 0.16. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EBAY currently has a PEG ratio of 1.54.

Another notable valuation metric for PROSY is its P/B ratio of 5.27. 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, EBAY has a P/B of 8.95.

Based on these metrics and many more, PROSY holds a Value grade of A, while EBAY has a Value grade of D.

PROSY sticks out from EBAY in both our Zacks Rank and Style Scores models, so value investors will likely feel that PROSY is the better option right now.

Zacks' 7 Best Strong Buy Stocks (New Research Report)

Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.

Click Here, It's Really Free

Published in