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18 January
PROSY vs. AMZN: Which Stock Is the Better Value Option?

Investors with an interest in Internet - Commerce stocks have likely encountered both Prosus N.V. Sponsored ADR (PROSY) and Amazon (AMZN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Both Prosus N.V. Sponsored ADR and Amazon have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have 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.

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.

PROSY currently has a forward P/E ratio of 3.18, while AMZN has a forward P/E of 41.64. We also note that PROSY has a PEG ratio of 0.07. 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. AMZN currently has a PEG ratio of 1.46.

Another notable valuation metric for PROSY is its P/B ratio of 4.81. 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, AMZN has a P/B of 8.57.

Based on these metrics and many more, PROSY holds a Value grade of B, while AMZN has a Value grade of C.

Both PROSY and AMZN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PROSY is the superior value option right now.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.