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LGF.A vs. IMAX: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Film and Television Production and Distribution sector might want to consider either Lions Gate Entertainment (LGF.A - Free Report) or Imax (IMAX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.

Right now, Lions Gate Entertainment is sporting a Zacks Rank of #2 (Buy), while Imax has a Zacks Rank of #3 (Hold). This means that LGF.A'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 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.

LGF.A currently has a forward P/E ratio of 10.04, while IMAX has a forward P/E of 17.74. We also note that LGF.A has a PEG ratio of 0.67. 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. IMAX currently has a PEG ratio of 1.01.

Another notable valuation metric for LGF.A is its P/B ratio of 0.77. 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, IMAX has a P/B of 2.07.

These metrics, and several others, help LGF.A earn a Value grade of A, while IMAX has been given a Value grade of C.

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


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