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AKAM or TTD: Which Is the Better Value Stock Right Now?

Investors interested in Internet - Services stocks are likely familiar with Akamai Technologies (AKAM) and The Trade Desk (TTD). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Akamai Technologies has a Zacks Rank of #2 (Buy), while The Trade Desk has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AKAM has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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

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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.

AKAM currently has a forward P/E ratio of 15.98, while TTD has a forward P/E of 56.21. We also note that AKAM has a PEG ratio of 1.60. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TTD currently has a PEG ratio of 2.34.

Another notable valuation metric for AKAM is its P/B ratio of 3.45. 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 17.63.

These metrics, and several others, help AKAM earn a Value grade of B, while TTD has been given a Value grade of F.

AKAM is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AKAM is likely the superior value option right now.

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Akamai Technologies, Inc. (AKAM) : Free Stock Analysis Report

The Trade Desk (TTD) : Free Stock Analysis Report

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Zacks Investment Research