Yahoo Finance STM or NVDA: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Semiconductor - General sector have probably already heard of STMicroelectronics (STM) and Nvidia (NVDA). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Currently, STMicroelectronics has a Zacks Rank of #2 (Buy), while Nvidia has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that STM likely has seen a stronger improvement to its earnings outlook than NVDA 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.
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.
STM currently has a forward P/E ratio of 13.91, while NVDA has a forward P/E of 34.59. We also note that STM has a PEG ratio of 2.78. 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. NVDA currently has a PEG ratio of 3.37.
Another notable valuation metric for STM is its P/B ratio of 3.09. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NVDA has a P/B of 19.26.
Based on these metrics and many more, STM holds a Value grade of B, while NVDA has a Value grade of F.
STM sticks out from NVDA in both our Zacks Rank and Style Scores models, so value investors will likely feel that STM is the better option right now.
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STMicroelectronics N.V. (STM) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
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