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

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Investors interested in Broadcast Radio and Television stocks are likely familiar with Gray Television (GTN - Free Report) and Netflix (NFLX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both Gray Television and Netflix are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

GTN currently has a forward P/E ratio of 3.30, while NFLX has a forward P/E of 51.43. We also note that GTN has a PEG ratio of 0.33. 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. NFLX currently has a PEG ratio of 1.71.

Another notable valuation metric for GTN is its P/B ratio of 0.68. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NFLX has a P/B of 18.25.

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

Both GTN and NFLX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GTN is the superior value option right now.


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