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XPO or DESP: Which Is the Better Value Stock Right Now?

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Investors with an interest in Transportation - Services stocks have likely encountered both XPO Logistics (XPO - Free Report) and Despegar.com (DESP - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

XPO Logistics has a Zacks Rank of #2 (Buy), while Despegar.com has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that XPO likely has seen a stronger improvement to its earnings outlook than DESP has recently. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

XPO currently has a forward P/E ratio of 17.03, while DESP has a forward P/E of 83.51. We also note that XPO has a PEG ratio of 0.56. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DESP currently has a PEG ratio of 4.37.

Another notable valuation metric for XPO is its P/B ratio of 2.54. 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, DESP has a P/B of 4.92.

Based on these metrics and many more, XPO holds a Value grade of A, while DESP has a Value grade of D.

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


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