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BIDU vs. SHOP: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Internet - Services sector might want to consider either Baidu Inc. (BIDU - Free Report) or Shopify (SHOP - Free Report) . 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Baidu Inc. is sporting a Zacks Rank of #1 (Strong Buy), while Shopify has a Zacks Rank of #3 (Hold). This means that BIDU's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
BIDU currently has a forward P/E ratio of 13.34, while SHOP has a forward P/E of 758.85. We also note that BIDU has a PEG ratio of 0.70. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SHOP currently has a PEG ratio of 57.06.
Another notable valuation metric for BIDU is its P/B ratio of 1.60. 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, SHOP has a P/B of 7.20.
Based on these metrics and many more, BIDU holds a Value grade of B, while SHOP has a Value grade of F.
BIDU is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BIDU is likely the superior value option right now.
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BIDU vs. SHOP: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Internet - Services sector might want to consider either Baidu Inc. (BIDU - Free Report) or Shopify (SHOP - Free Report) . 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Baidu Inc. is sporting a Zacks Rank of #1 (Strong Buy), while Shopify has a Zacks Rank of #3 (Hold). This means that BIDU's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
BIDU currently has a forward P/E ratio of 13.34, while SHOP has a forward P/E of 758.85. We also note that BIDU has a PEG ratio of 0.70. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SHOP currently has a PEG ratio of 57.06.
Another notable valuation metric for BIDU is its P/B ratio of 1.60. 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, SHOP has a P/B of 7.20.
Based on these metrics and many more, BIDU holds a Value grade of B, while SHOP has a Value grade of F.
BIDU is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BIDU is likely the superior value option right now.