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GTN vs. NFLX: Which Stock Is the Better Value Option?

Investors interested in stocks from the Broadcast Radio and Television sector have probably already heard of Gray Television (GTN) and Netflix (NFLX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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

Gray Television and Netflix are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GTN has an improving earnings outlook. However, value investors will care about much more than just this.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

GTN currently has a forward P/E ratio of 3.92, while NFLX has a forward P/E of 59.08. We also note that GTN has a PEG ratio of 0.39. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NFLX currently has a PEG ratio of 1.97.

Another notable valuation metric for GTN is its P/B ratio of 0.81. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NFLX has a P/B of 20.67.

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

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


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Gray Television, Inc. (GTN) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
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