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GTN vs. NFLX: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Broadcast Radio and Television sector have probably already heard of Gray Television (GTN - Free Report) and 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.

Right now, Gray Television is sporting a Zacks Rank of #1 (Strong Buy), while Netflix has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GTN has an improving earnings outlook. But this is just one piece of the puzzle 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

GTN currently has a forward P/E ratio of 22.74, while NFLX has a forward P/E of 100.66. We also note that GTN has a PEG ratio of 2.27. 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 3.36.

Another notable valuation metric for GTN is its P/B ratio of 1.55. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NFLX has a P/B of 21.50.

These are just a few of the metrics contributing to GTN's Value grade of B and NFLX's Value grade of F.

GTN 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 GTN is likely the superior value option right now.


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