Tuesday, September 21, 2021

Netflix Stock – Which Is the Better Value Stock Right Now?

Investors interested in Broadcast Radio and Television stocks are likely familiar with Nexstar Broadcasting Group (NXST) and Netflix (NFLX). 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.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Nexstar Broadcasting Group has a Zacks Rank of #2 (Buy), while Netflix has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that NXST likely has seen a stronger improvement to its earnings outlook than NFLX has recently. But this is only part of the picture 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company’s fair value.

NXST currently has a forward P/E ratio of 10.41, while NFLX has a forward P/E of 54.56. We also note that NXST has a PEG ratio of 1.04. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company’s expected earnings growth rate. NFLX currently has a PEG ratio of 1.89.

Another notable valuation metric for NXST is its P/B ratio of 2.59. The P/B ratio is used to compare a stock’s market value with its book value, which is defined as total assets minus total liabilities. For comparison, NFLX has a P/B of 21.42.

Based on these metrics and many more, NXST holds a Value grade of A, while NFLX has a Value grade of D.

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

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Netflix Stock – Which Is the Better Value Stock Right Now?

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