Investors with an interest in Internet - Commerce stocks have likely encountered both PDD Holdings Inc. Sponsored ADR (PDD) and Global-e Online Ltd. (GLBE). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, PDD Holdings Inc. Sponsored ADR is sporting a Zacks Rank of #1 (Strong Buy), while Global-e Online Ltd. has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PDD is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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 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.
PDD currently has a forward P/E ratio of 12.50, while GLBE has a forward P/E of 105.89. We also note that PDD has a PEG ratio of 1.29. 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. GLBE currently has a PEG ratio of 1.78.
Another notable valuation metric for PDD is its P/B ratio of 3.31. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, GLBE has a P/B of 6.25.
Based on these metrics and many more, PDD holds a Value grade of B, while GLBE has a Value grade of F.
PDD stands above GLBE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PDD is the superior value option right now.
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Global-e Online Ltd. (GLBE) : 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.
