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MODG vs. SRAD: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Leisure and Recreation Products sector might want to consider either Topgolf Callaway Brands (MODG - Free Report) or Sportradar Group AG (SRAD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Topgolf Callaway Brands has a Zacks Rank of #1 (Strong Buy), while Sportradar Group AG has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MODG 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.

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.

MODG currently has a forward P/E ratio of 53.50, while SRAD has a forward P/E of 793. We also note that MODG has a PEG ratio of 6.18. 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. SRAD currently has a PEG ratio of 19.97.

Another notable valuation metric for MODG is its P/B ratio of 0.45. 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, SRAD has a P/B of 17.50.

These are just a few of the metrics contributing to MODG's Value grade of A and SRAD's Value grade of F.

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


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