Yahoo Finance JD or MELI: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Internet - Commerce sector might want to consider either JD.com, Inc. (JD) or MercadoLibre (MELI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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, JD.com, Inc. is sporting a Zacks Rank of #1 (Strong Buy), while MercadoLibre has a Zacks Rank of #3 (Hold). This means that JD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.
JD currently has a forward P/E ratio of 8.09, while MELI has a forward P/E of 40.24. We also note that JD has a PEG ratio of 0.18. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MELI currently has a PEG ratio of 0.93.
Another notable valuation metric for JD is its P/B ratio of 0.96. 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, MELI has a P/B of 23.78.
These are just a few of the metrics contributing to JD's Value grade of A and MELI's Value grade of C.
JD stands above MELI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that JD is the superior value option right now.
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JD.com, Inc. (JD) : Free Stock Analysis Report
MercadoLibre, Inc. (MELI) : Free Stock Analysis Report
