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FNKO vs. VZIO: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors with an interest in Consumer Products - Discretionary stocks have likely encountered both Funko-A (FNKO) and VIZIO Holding Corp. (VZIO). 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.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Funko-A has a Zacks Rank of #2 (Buy), while VIZIO Holding Corp. has a Zacks Rank of #3 (Hold) right now. This means that FNKO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

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The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

FNKO currently has a forward P/E ratio of 12, while VZIO has a forward P/E of 204.60. We also note that FNKO has a PEG ratio of 0.58. 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. VZIO currently has a PEG ratio of 8.18.

Another notable valuation metric for FNKO is its P/B ratio of 2.77. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, VZIO has a P/B of 4.07.

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

FNKO 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 FNKO is likely the superior value option right now.


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Funko, Inc. (FNKO) : Free Stock Analysis Report
 
VIZIO Holding Corp. (VZIO) : Free Stock Analysis Report
 
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Zacks Investment Research