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GTN or NFLX: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Broadcast Radio and Television sector might want to consider either Gray Television (GTN - Free Report) or Netflix (NFLX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Gray Television has a Zacks Rank of #2 (Buy), while Netflix has a Zacks Rank of #3 (Hold) right now. This means that GTN'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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

GTN currently has a forward P/E ratio of 13.02, while NFLX has a forward P/E of 48.17. We also note that GTN has a PEG ratio of 1.30. 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. NFLX currently has a PEG ratio of 1.48.

Another notable valuation metric for GTN is its P/B ratio of 1.25. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NFLX has a P/B of 17.30.

Based on these metrics and many more, GTN holds a Value grade of A, while NFLX has a Value grade of D.

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


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