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LGF.A vs. IMAX: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Film and Television Production and Distribution stocks have likely encountered both Lions Gate Entertainment (LGF.A - Free Report) and Imax (IMAX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Lions Gate Entertainment has a Zacks Rank of #2 (Buy), while Imax has a Zacks Rank of #4 (Sell) right now. 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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 7.99, while IMAX has a forward P/E of 19.19. We also note that LGF.A has a PEG ratio of 0.53. 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. IMAX currently has a PEG ratio of 1.10.

Another notable valuation metric for LGF.A is its P/B ratio of 0.61. 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 2.17.

These are just a few of the metrics contributing to LGF.A's Value grade of A and IMAX's Value grade of C.

LGF.A stands above IMAX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LGF.A is the superior value option right now.


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