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STMP or BABA: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Internet - Commerce sector might want to consider either Stamps.com or Alibaba (BABA - 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.
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.
Right now, Stamps.com is sporting a Zacks Rank of #1 (Strong Buy), while Alibaba 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 STMP is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 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.
STMP currently has a forward P/E ratio of 15.04, while BABA has a forward P/E of 26.21. We also note that STMP has a PEG ratio of 1. 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. BABA currently has a PEG ratio of 1.19.
Another notable valuation metric for STMP is its P/B ratio of 1.74. 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, BABA has a P/B of 4.98.
These are just a few of the metrics contributing to STMP's Value grade of A and BABA's Value grade of D.
STMP has seen stronger estimate revision activity and sports more attractive valuation metrics than BABA, so it seems like value investors will conclude that STMP is the superior option right now.
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STMP or BABA: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Internet - Commerce sector might want to consider either Stamps.com or Alibaba (BABA - 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.
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.
Right now, Stamps.com is sporting a Zacks Rank of #1 (Strong Buy), while Alibaba 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 STMP is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 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.
STMP currently has a forward P/E ratio of 15.04, while BABA has a forward P/E of 26.21. We also note that STMP has a PEG ratio of 1. 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. BABA currently has a PEG ratio of 1.19.
Another notable valuation metric for STMP is its P/B ratio of 1.74. 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, BABA has a P/B of 4.98.
These are just a few of the metrics contributing to STMP's Value grade of A and BABA's Value grade of D.
STMP has seen stronger estimate revision activity and sports more attractive valuation metrics than BABA, so it seems like value investors will conclude that STMP is the superior option right now.