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CNTY vs. ZNGA: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors looking for stocks in the Gaming sector might want to consider either Century Casinos (CNTY) or Zynga (ZNGA). 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 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.

Currently, Century Casinos has a Zacks Rank of #2 (Buy), while Zynga has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CNTY 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 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.

CNTY currently has a forward P/E ratio of 24.33, while ZNGA has a forward P/E of 30.96. We also note that CNTY has a PEG ratio of 0.97. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ZNGA currently has a PEG ratio of 1.38.

Another notable valuation metric for CNTY is its P/B ratio of 1.40. 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, ZNGA has a P/B of 3.36.

Based on these metrics and many more, CNTY holds a Value grade of B, while ZNGA has a Value grade of F.

CNTY has seen stronger estimate revision activity and sports more attractive valuation metrics than ZNGA, so it seems like value investors will conclude that CNTY is the superior option right now.

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Century Casinos, Inc. (CNTY) : Free Stock Analysis Report
Zynga Inc. (ZNGA) : Free Stock Analysis Report
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