Investors interested in stocks from the Leisure and Recreation Services sector have probably already heard of Life Time Group Holdings, Inc. (LTH) and Vail Resorts (MTN). But which of these two stocks presents investors with the better value opportunity right now? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Life Time Group Holdings, Inc. is sporting a Zacks Rank of #2 (Buy), while Vail Resorts has a Zacks Rank of #3 (Hold). This means that LTH's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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 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.
LTH currently has a forward P/E ratio of 22.44, while MTN has a forward P/E of 27.66. We also note that LTH has a PEG ratio of 1.29. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MTN currently has a PEG ratio of 11.20.
Another notable valuation metric for LTH is its P/B ratio of 2.68. 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, MTN has a P/B of 9.75.
These metrics, and several others, help LTH earn a Value grade of B, while MTN has been given a Value grade of C.
LTH 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 LTH is likely the superior value option right now.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power .
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>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
Life Time Group Holdings, Inc. (LTH): Free Stock Analysis Report
Vail Resorts, Inc. (MTN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).