LTH or VIK: Which Is the Better Value Stock Right Now?

Investors with an interest in Leisure and Recreation Services stocks have likely encountered both Life Time Group Holdings, Inc. (LTH) and Viking Holdings (VIK). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Life Time Group Holdings, Inc. and Viking Holdings are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that LTH likely has seen a stronger improvement to its earnings outlook than VIK has recently. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

LTH currently has a forward P/E ratio of 16.81, while VIK has a forward P/E of 24.21. We also note that LTH has a PEG ratio of 1.05. 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. VIK currently has a PEG ratio of 1.48.

Another notable valuation metric for LTH is its P/B ratio of 1.95. 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, VIK has a P/B of 31.92.

These metrics, and several others, help LTH earn a Value grade of A, while VIK has been given a Value grade of C.

LTH sticks out from VIK in both our Zacks Rank and Style Scores models, so value investors will likely feel that LTH is the better option right now.

#1 Semiconductor Stock to Buy (Not NVDA)

The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.

One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research