Back to top

Image: Bigstock

LTH vs. VIK: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in Leisure and Recreation Services stocks are likely familiar with Life Time Group Holdings, Inc. (LTH - Free Report) and Viking Holdings (VIK - 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.

Right now, Life Time Group Holdings, Inc. is sporting a Zacks Rank of #2 (Buy), while Viking Holdings has a Zacks Rank of #3 (Hold). This means that LTH's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

LTH currently has a forward P/E ratio of 20.00, while VIK has a forward P/E of 28.08. We also note that LTH has a PEG ratio of 1.22. 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. VIK currently has a PEG ratio of 1.33.

Another notable valuation metric for LTH is its P/B ratio of 2.28. 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, VIK has a P/B of 38.48.

These are just a few of the metrics contributing to LTH's Value grade of B and VIK's Value grade of D.

LTH sticks out from VIK in both our Zacks Rank and Style Scores models, so value investors will likely feel that LTH 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