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NXST or ROKU: Which Is the Better Value Stock Right Now?

NXST vs. ROKU: Which Stock Is the Better Value Option?

This story originally appeared on Zacks

Investors interested in Broadcast Radio and Television stocks are likely familiar with Nexstar Broadcasting Group (NXST) and Roku (ROKU). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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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.

Currently, Nexstar Broadcasting Group has a Zacks Rank of #2 (Buy), while Roku has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NXST is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

NXST currently has a forward P/E ratio of 5.93, while ROKU has a forward P/E of 144.12. We also note that NXST has a PEG ratio of 0.59. 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. ROKU currently has a PEG ratio of 2.94.

Another notable valuation metric for NXST is its P/B ratio of 2.43. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ROKU has a P/B of 11.60.

Based on these metrics and many more, NXST holds a Value grade of A, while ROKU has a Value grade of F.

NXST has seen stronger estimate revision activity and sports more attractive valuation metrics than ROKU, so it seems like value investors will conclude that NXST is the superior option right now.

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Nexstar Media Group, Inc (NXST): Free Stock Analysis Report


Roku, Inc. (ROKU): Free Stock Analysis Report


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