AKAM or TTD: Which Is the Better Value Stock Right Now?
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Investors interested in Internet - Services stocks are likely familiar with Akamai Technologies (AKAM) and The Trade Desk (TTD). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Akamai Technologies has a Zacks Rank of #2 (Buy), while The Trade Desk has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AKAM is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
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.
AKAM currently has a forward P/E ratio of 15.77, while TTD has a forward P/E of 70.39. We also note that AKAM has a PEG ratio of 2.23. 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. TTD currently has a PEG ratio of 2.91.
Another notable valuation metric for AKAM is its P/B ratio of 3.25. 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, TTD has a P/B of 23.41.
Based on these metrics and many more, AKAM holds a Value grade of B, while TTD has a Value grade of F.
AKAM has seen stronger estimate revision activity and sports more attractive valuation metrics than TTD, so it seems like value investors will conclude that AKAM is the superior option right now.
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Akamai Technologies, Inc. (AKAM) : Free Stock Analysis Report
The Trade Desk (TTD) : Free Stock Analysis Report