JD vs. BKNG: Which Stock Should Value Investors Buy Now?

·2 min read

Investors interested in stocks from the Internet - Commerce sector have probably already heard of JD.com, Inc. (JD) and Booking Holdings (BKNG). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

JD.com, Inc. and Booking Holdings are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that JD has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

JD currently has a forward P/E ratio of 57.38, while BKNG has a forward P/E of 58.35. We also note that JD has a PEG ratio of 2.13. 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. BKNG currently has a PEG ratio of 3.54.

Another notable valuation metric for JD is its P/B ratio of 2.84. 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, BKNG has a P/B of 20.90.

Based on these metrics and many more, JD holds a Value grade of B, while BKNG has a Value grade of D.

JD stands above BKNG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that JD is the superior value option right now.


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