SIRI 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 Sirius XM (SIRI) or Netflix $NFLX (NFLX). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 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.
Currently, both Sirius XM and Netflix are holding a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
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.
SIRI currently has a forward P/E ratio of 7.73, while NFLX has a forward P/E of 32.42. We also note that SIRI has a PEG ratio of 0.64. 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. NFLX currently has a PEG ratio of 1.56.
Another notable valuation metric for SIRI is its P/B ratio of 0.7. 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 16.36.
Based on these metrics and many more, SIRI holds a Value grade of A, while NFLX has a Value grade of F.
Both SIRI and NFLX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SIRI is the superior value option right now.
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Sirius XM Holdings Inc. (SIRI): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
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