FOX vs. NFLX: Which Stock Should Value Investors Buy Now?
Investors with an interest in Broadcast Radio and Television stocks have likely encountered both Fox Corporation (FOX) and Netflix (NFLX). 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.
Fox Corporation and Netflix are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FOX is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.
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.
FOX currently has a forward P/E ratio of 11.71, while NFLX has a forward P/E of 44.06. We also note that FOX has a PEG ratio of 1.66. 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 1.68.
Another notable valuation metric for FOX is its P/B ratio of 1.74. 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, NFLX has a P/B of 16.39.
Based on these metrics and many more, FOX holds a Value grade of A, while NFLX has a Value grade of D.
FOX sticks out from NFLX in both our Zacks Rank and Style Scores models, so value investors will likely feel that FOX is the better option right now.
Zacks’ Research Chief Names “Stock Most Likely to Double”
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Fox Corporation (FOX) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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