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

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Investors looking for stocks in the Leisure and Recreation Services sector might want to consider either Atour Lifestyle Holdings Limited Sponsored ADR (ATAT - Free Report) or Viking Holdings (VIK - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Atour Lifestyle Holdings Limited Sponsored ADR and Viking Holdings are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ATAT 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.

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.

ATAT currently has a forward P/E ratio of 15.51, while VIK has a forward P/E of 26.74. We also note that ATAT has a PEG ratio of 0.88. 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. VIK currently has a PEG ratio of 1.01.

Another notable valuation metric for ATAT is its P/B ratio of 9.17. 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 22.67.

These metrics, and several others, help ATAT earn a Value grade of B, while VIK has been given a Value grade of D.

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

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