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ZLNDY vs. AMZN: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Internet - Commerce sector have probably already heard of Zalando (ZLNDY - Free Report) and Amazon (AMZN - 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.
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 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.
Currently, Zalando has a Zacks Rank of #2 (Buy), while Amazon has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ZLNDY is likely seeing its earnings outlook improve to a greater extent. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ZLNDY currently has a forward P/E ratio of 36.17, while AMZN has a forward P/E of 73.46. We also note that ZLNDY has a PEG ratio of 1.93. 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. AMZN currently has a PEG ratio of 4.
Another notable valuation metric for ZLNDY is its P/B ratio of 4.19. 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, AMZN has a P/B of 7.64.
These are just a few of the metrics contributing to ZLNDY's Value grade of B and AMZN's Value grade of C.
ZLNDY has seen stronger estimate revision activity and sports more attractive valuation metrics than AMZN, so it seems like value investors will conclude that ZLNDY is the superior option right now.