Investors looking for stocks in the Internet - Commerce sector might want to consider either Alibaba (BABA) or Global-e Online Ltd. (GLBE). 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.
Alibaba and Global-e Online Ltd. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BABA likely has seen a stronger improvement to its earnings outlook than GLBE has recently. 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.
BABA currently has a forward P/E ratio of 11.45, while GLBE has a forward P/E of 168.88. We also note that BABA has a PEG ratio of 0.38. 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. GLBE currently has a PEG ratio of 2.86.
Another notable valuation metric for BABA is its P/B ratio of 2.01. 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, GLBE has a P/B of 7.16.
Based on these metrics and many more, BABA holds a Value grade of B, while GLBE has a Value grade of F.
BABA stands above GLBE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BABA is the superior value option right now.
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Alibaba Group Holding Limited (BABA): Free Stock Analysis Report Global-e Online Ltd. (GLBE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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