Investors looking for stocks in the Leisure and Recreation Services sector might want to consider either Carnival (CCL) or Atour Lifestyle Holdings Limited Sponsored ADR (ATAT). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Carnival has a Zacks Rank of #1 (Strong Buy), while Atour Lifestyle Holdings Limited Sponsored ADR has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CCL likely has seen a stronger improvement to its earnings outlook than ATAT has recently. 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.
CCL currently has a forward P/E ratio of 13.96, while ATAT has a forward P/E of 24.02. We also note that CCL has a PEG ratio of 0.64. 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. ATAT currently has a PEG ratio of 1.24.
Another notable valuation metric for CCL is its P/B ratio of 2.93. 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, ATAT has a P/B of 11.5.
These are just a few of the metrics contributing to CCL's Value grade of A and ATAT's Value grade of C.
CCL sticks out from ATAT in both our Zacks Rank and Style Scores models, so value investors will likely feel that CCL is the better option right now.
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Carnival Corporation (CCL): Free Stock Analysis Report Atour Lifestyle Holdings Limited Sponsored ADR (ATAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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