Investors with an interest in Audio Video Production stocks have likely encountered both Sony (SNE) and GoPro (GPRO). But which of these two stocks offers value investors a better bang for their buck right now? We’ll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Sony has a Zacks Rank of #1 (Strong Buy), while GoPro 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 SNE is likely seeing its earnings outlook improve to a greater extent. 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.
SNE currently has a forward P/E ratio of 9.37, while GPRO has a forward P/E of 22.10. We also note that SNE has a PEG ratio of 0.93. 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. GPRO currently has a PEG ratio of 2.21.
Another notable valuation metric for SNE is its P/B ratio of 1.61. 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, GPRO has a P/B of 4.12.
These are just a few of the metrics contributing to SNE’s Value grade of A and GPRO’s Value grade of F.
SNE 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 SNE is likely the superior value option right now.
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