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GOOGL or SHOP: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Internet - Services sector have probably already heard of Alphabet (GOOGL - Free Report) and Shopify (SHOP - 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Alphabet is sporting a Zacks Rank of #2 (Buy), while Shopify has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GOOGL has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
GOOGL currently has a forward P/E ratio of 25.60, while SHOP has a forward P/E of 547.94. We also note that GOOGL has a PEG ratio of 1.46. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SHOP currently has a PEG ratio of 23.15.
Another notable valuation metric for GOOGL is its P/B ratio of 4.49. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SHOP has a P/B of 16.76.
These are just a few of the metrics contributing to GOOGL's Value grade of B and SHOP's Value grade of F.
GOOGL stands above SHOP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GOOGL is the superior value option right now.
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GOOGL or SHOP: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Internet - Services sector have probably already heard of Alphabet (GOOGL - Free Report) and Shopify (SHOP - 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Alphabet is sporting a Zacks Rank of #2 (Buy), while Shopify has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GOOGL has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
GOOGL currently has a forward P/E ratio of 25.60, while SHOP has a forward P/E of 547.94. We also note that GOOGL has a PEG ratio of 1.46. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SHOP currently has a PEG ratio of 23.15.
Another notable valuation metric for GOOGL is its P/B ratio of 4.49. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SHOP has a P/B of 16.76.
These are just a few of the metrics contributing to GOOGL's Value grade of B and SHOP's Value grade of F.
GOOGL stands above SHOP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GOOGL is the superior value option right now.