Back to top

Image: Bigstock

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

Read MoreHide Full Article

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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Gray Television has a Zacks Rank of #2 (Buy), while Netflix has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that GTN likely has seen a stronger improvement to its earnings outlook than NFLX has recently. But this is just one piece of the puzzle for value investors.

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.

GTN currently has a forward P/E ratio of 5.77, while NFLX has a forward P/E of 71.26. We also note that GTN has a PEG ratio of 0.58. 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. NFLX currently has a PEG ratio of 2.38.

Another notable valuation metric for GTN is its P/B ratio of 0.92. 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 23.94.

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

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Netflix, Inc. (NFLX) - free report >>

Gray Television, Inc. (GTN) - free report >>

Published in