Investors interested in stocks from the Internet - Services sector have probably already heard of Trivago N.V. ADS (TRVG) and Zscaler (ZS). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Trivago N.V. ADS has a Zacks Rank of #2 (Buy), while Zscaler has a Zacks Rank of #3 (Hold) right now. This means that TRVG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
TRVG currently has a forward P/E ratio of 27.47, while ZS has a forward P/E of 177.32. We also note that TRVG has a PEG ratio of 1.30. 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. ZS currently has a PEG ratio of 3.73.
Another notable valuation metric for TRVG is its P/B ratio of 0.93. 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, ZS has a P/B of 48.47.
Based on these metrics and many more, TRVG holds a Value grade of A, while ZS has a Value grade of F.
TRVG sticks out from ZS in both our Zacks Rank and Style Scores models, so value investors will likely feel that TRVG is the better option right now.
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Trivago N.V. ADS (TRVG) : Free Stock Analysis Report
Zscaler, Inc. (ZS) : Free Stock Analysis Report
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