Back to top

AMCX or NFLX: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors looking for stocks in the Broadcast Radio and Television sector might want to consider either AMC Networks (AMCX - Free Report) or Netflix (NFLX - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

AMC Networks and Netflix are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that AMCX'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 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.

AMCX currently has a forward P/E ratio of 6.32, while NFLX has a forward P/E of 104.28. We also note that AMCX has a PEG ratio of 0.72. 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. NFLX currently has a PEG ratio of 3.48.

Another notable valuation metric for AMCX is its P/B ratio of 6.31. 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, NFLX has a P/B of 26.49.

Based on these metrics and many more, AMCX holds a Value grade of A, while NFLX has a Value grade of F.

AMCX 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 AMCX is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


AMC Networks Inc. (AMCX) - free report >>

Netflix, Inc. (NFLX) - free report >>

Published in