Investors interested in stocks from the Leisure and Recreation Services sector have probably already heard of Expedia (EXPE) and Viking Holdings (VIK). 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.
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.
Right now, Expedia is sporting a Zacks Rank of #1 (Strong Buy), while Viking Holdings has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EXPE has an improving earnings outlook. But this is just one piece of the puzzle 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 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.
EXPE currently has a forward P/E ratio of 13.14, while VIK has a forward P/E of 21.72. We also note that EXPE has a PEG ratio of 0.67. 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. VIK currently has a PEG ratio of 1.33.
Another notable valuation metric for EXPE is its P/B ratio of 12.1. 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, VIK has a P/B of 28.52.
These metrics, and several others, help EXPE earn a Value grade of B, while VIK has been given a Value grade of C.
EXPE has seen stronger estimate revision activity and sports more attractive valuation metrics than VIK, so it seems like value investors will conclude that EXPE is the superior option right now.
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Viking Holdings Ltd. (VIK) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
