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BEKE vs. Z: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Real Estate - Operations sector might want to consider either KE Holdings Inc. Sponsored ADR (BEKE - Free Report) or Zillow (Z - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

KE Holdings Inc. Sponsored ADR has a Zacks Rank of #2 (Buy), while Zillow has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BEKE has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

BEKE currently has a forward P/E ratio of 15.79, while Z has a forward P/E of 25.55. We also note that BEKE has a PEG ratio of 0.33. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Z currently has a PEG ratio of 1.42.

Another notable valuation metric for BEKE is its P/B ratio of 2.01. 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, Z has a P/B of 2.08.

These metrics, and several others, help BEKE earn a Value grade of B, while Z has been given a Value grade of F.

BEKE sticks out from Z in both our Zacks Rank and Style Scores models, so value investors will likely feel that BEKE is the better option right now.


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Zillow Group, Inc. (Z) - free report >>

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