Advertisement
Australia markets closed
  • ALL ORDS

    7,937.50
    -0.40 (-0.01%)
     
  • ASX 200

    7,683.00
    -0.50 (-0.01%)
     
  • AUD/USD

    0.6499
    +0.0010 (+0.16%)
     
  • OIL

    82.93
    -0.43 (-0.52%)
     
  • GOLD

    2,332.40
    -9.70 (-0.41%)
     
  • Bitcoin AUD

    98,566.22
    -3,664.74 (-3.58%)
     
  • CMC Crypto 200

    1,390.74
    -33.36 (-2.34%)
     
  • AUD/EUR

    0.6072
    +0.0016 (+0.26%)
     
  • AUD/NZD

    1.0948
    +0.0018 (+0.16%)
     
  • NZX 50

    11,946.43
    +143.15 (+1.21%)
     
  • NASDAQ

    17,526.80
    +55.33 (+0.32%)
     
  • FTSE

    8,040.38
    -4.43 (-0.06%)
     
  • Dow Jones

    38,460.92
    -42.77 (-0.11%)
     
  • DAX

    18,088.70
    -48.95 (-0.27%)
     
  • Hang Seng

    17,201.27
    +372.34 (+2.21%)
     
  • NIKKEI 225

    38,460.08
    +907.92 (+2.42%)
     

UBSFY or RRR: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Gaming sector have probably already heard of UbiSoft Entertainment Inc. (UBSFY) and Red Rock Resorts (RRR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

UbiSoft Entertainment Inc. has a Zacks Rank of #2 (Buy), while Red Rock Resorts has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UBSFY is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

ADVERTISEMENT

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.

UBSFY currently has a forward P/E ratio of 15.54, while RRR has a forward P/E of 31.91. We also note that UBSFY 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. RRR currently has a PEG ratio of 4.14.

Another notable valuation metric for UBSFY is its P/B ratio of 1.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RRR has a P/B of 39.21.

These are just a few of the metrics contributing to UBSFY's Value grade of A and RRR's Value grade of C.

UBSFY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that UBSFY is likely the superior value option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

UbiSoft Entertainment Inc. (UBSFY) : Free Stock Analysis Report

Red Rock Resorts, Inc. (RRR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research