Which stocks should value investors buy now?

Investors interested in internet retail stocks have probably come across both Amazon (AMZN) and Coupang, Inc. (CPNG). But which of these two stocks is more attractive to value investors? To find out, we need to take a closer look at the two.

We have found that the best way to discover great value opportunities is to combine a strong Zacks Rank with an excellent grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores evaluate companies based on specific traits.

Currently, Amazon has a Zacks Rank of #2 (Buy), while Coupang, Inc. has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive earnings estimate revisions, so investors can take comfort in knowing that AMZN has an improved earnings outlook. But that’s only one piece of the puzzle for value investors.

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

The Style Score Value assessment incorporates a number of important fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and numerous other key statistics commonly used by value investors.

AMZN currently has a forward P/E ratio of 42.57, while CPNG has a forward P/E ratio of 864.80. We also note that AMZN has a PEG ratio of 1.44. This popular number is similar to the widely used P/E ratio, but the PEG ratio also takes into account a company’s expected EPS growth rate. CPNG currently has a PEG ratio of 46.20.

Another important valuation metric for AMZN is its P/B ratio of 9.37. Investors use the P/B ratio to compare a stock’s market value to its book value, which is defined as total assets minus total liabilities. For comparison, CPNG has a P/B ratio of 9.50.

Based on these and many other metrics, AMZN has a B rating, while CPNG has a C rating.

The story goes on

AMZN currently has an improving earnings outlook, which makes it stand out in our Zacks Rank model. And based on the valuation metrics mentioned above, we believe AMZN is probably the better value option right now.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Coupang, Inc. (CPNG): Free Stock Analysis Report

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