Yahoo Finance JD vs. MELI: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Internet - Commerce sector have probably already heard of JD.com, Inc. (JD) and MercadoLibre (MELI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
JD.com, Inc. has a Zacks Rank of #1 (Strong Buy), while MercadoLibre has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that JD likely has seen a stronger improvement to its earnings outlook than MELI 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.
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.
JD currently has a forward P/E ratio of 9.20, while MELI has a forward P/E of 42.33. We also note that JD has a PEG ratio of 0.21. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MELI currently has a PEG ratio of 0.97.
Another notable valuation metric for JD is its P/B ratio of 1.09. 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, MELI has a P/B of 24.01.
These are just a few of the metrics contributing to JD's Value grade of A and MELI's Value grade of C.
JD 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 JD is likely the superior value option right now.
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JD.com, Inc. (JD) : Free Stock Analysis Report
MercadoLibre, Inc. (MELI) : Free Stock Analysis Report
