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

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Investors interested in Broadcast Radio and Television stocks are likely familiar with Fox (FOXA - Free Report) and Netflix (NFLX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Fox and Netflix are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings 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.

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.

FOXA currently has a forward P/E ratio of 11.97, while NFLX has a forward P/E of 38.64. We also note that FOXA has a PEG ratio of 1.16. 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. NFLX currently has a PEG ratio of 1.97.

Another notable valuation metric for FOXA is its P/B ratio of 2.05. 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 16.42.

These metrics, and several others, help FOXA earn a Value grade of B, while NFLX has been given a Value grade of F.

Both FOXA and NFLX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FOXA is the superior value option right now.


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