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XP vs. FUTU: Which Stock Is the Better Value Option?
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Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both XP Inc.A (XP - Free Report) and Futu Holdings Limited Sponsored ADR (FUTU - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
XP Inc.A has a Zacks Rank of #2 (Buy), while Futu Holdings Limited Sponsored ADR has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that XP has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
XP currently has a forward P/E ratio of 8.07, while FUTU has a forward P/E of 9.63. We also note that XP has a PEG ratio of 0.53. 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. FUTU currently has a PEG ratio of 1.01.
Another notable valuation metric for XP is its P/B ratio of 1.9. 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, FUTU has a P/B of 2.72.
These metrics, and several others, help XP earn a Value grade of A, while FUTU has been given a Value grade of C.
XP has seen stronger estimate revision activity and sports more attractive valuation metrics than FUTU, so it seems like value investors will conclude that XP is the superior option right now.
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XP vs. FUTU: Which Stock Is the Better Value Option?
Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both XP Inc.A (XP - Free Report) and Futu Holdings Limited Sponsored ADR (FUTU - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
XP Inc.A has a Zacks Rank of #2 (Buy), while Futu Holdings Limited Sponsored ADR has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that XP has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
XP currently has a forward P/E ratio of 8.07, while FUTU has a forward P/E of 9.63. We also note that XP has a PEG ratio of 0.53. 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. FUTU currently has a PEG ratio of 1.01.
Another notable valuation metric for XP is its P/B ratio of 1.9. 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, FUTU has a P/B of 2.72.
These metrics, and several others, help XP earn a Value grade of A, while FUTU has been given a Value grade of C.
XP has seen stronger estimate revision activity and sports more attractive valuation metrics than FUTU, so it seems like value investors will conclude that XP is the superior option right now.