GTN vs. NFLX: Which Stock Is the Better Value Option?

Investors looking for stocks in the Broadcast Radio and Television sector might want to consider either Gray Media (GTN) or Netflix (NFLX). But which of these two companies is the best option for those looking for undervalued stocks? 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.

Currently, Gray Media has a Zacks Rank of #2 (Buy), while Netflix has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GTN likely has seen a stronger improvement to its earnings outlook than NFLX 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

GTN currently has a forward P/E ratio of 2.08, while NFLX has a forward P/E of 21.54. We also note that GTN has a PEG ratio of 0.10. 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. NFLX currently has a PEG ratio of 1.09.

Another notable valuation metric for GTN is its P/B ratio of 0.23. 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, NFLX has a P/B of 10.69.

These are just a few of the metrics contributing to GTN's Value grade of A and NFLX's Value grade of D.

GTN 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 GTN is likely the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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