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MSGM vs. RRR: Which Stock Is the Better Value Option?

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Investors interested in Gaming stocks are likely familiar with Motorsport Games Inc. (MSGM - Free Report) and Red Rock Resorts (RRR - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Motorsport Games Inc. has a Zacks Rank of #1 (Strong Buy), while Red Rock Resorts 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 MSGM is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

MSGM currently has a forward P/E ratio of 14.57, while RRR has a forward P/E of 34.87. We also note that MSGM has a PEG ratio of 0.58. 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. RRR currently has a PEG ratio of 4.41.

Another notable valuation metric for MSGM is its P/B ratio of 3.42. 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, RRR has a P/B of 19.17.

These are just a few of the metrics contributing to MSGM's Value grade of A and RRR's Value grade of C.

MSGM 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 MSGM is likely the superior value option right now.

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