Yahoo Finance DTC vs. MELI: Which Stock Is the Better Value Option?
Investors interested in Internet - Commerce stocks are likely familiar with Solo Brands, Inc. (DTC) and MercadoLibre (MELI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Solo Brands, Inc. has a Zacks Rank of #2 (Buy), while MercadoLibre has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that DTC likely has seen a stronger improvement to its earnings outlook than MELI 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 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.
DTC currently has a forward P/E ratio of 7.45, while MELI has a forward P/E of 79.96. We also note that DTC has a PEG ratio of 0.43. 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. MELI currently has a PEG ratio of 1.62.
Another notable valuation metric for DTC is its P/B ratio of 1.19. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MELI has a P/B of 30.64.
Based on these metrics and many more, DTC holds a Value grade of A, while MELI has a Value grade of C.
DTC sticks out from MELI in both our Zacks Rank and Style Scores models, so value investors will likely feel that DTC is the better option right now.
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Solo Brands, Inc. (DTC) : Free Stock Analysis Report
MercadoLibre, Inc. (MELI) : Free Stock Analysis Report
