EXPE vs. MELI: Which Stock Is the Better Value Option?

Core Viewpoint - Investors in the Internet - Commerce sector should consider Expedia (EXPE) and MercadoLibre (MELI) for potential undervalued stock opportunities [1] Group 1: Zacks Rank and Earnings Outlook - Expedia has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while MercadoLibre has a Zacks Rank of 4 (Sell) [3] - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, suggesting that EXPE is likely experiencing a more favorable earnings outlook than MELI [3] Group 2: Valuation Metrics - EXPE has a forward P/E ratio of 18.50, significantly lower than MELI's forward P/E of 51.95 [5] - The PEG ratio for EXPE is 1.05, while MELI's PEG ratio is 1.50, indicating that EXPE may offer better value relative to its expected earnings growth [5] - EXPE's P/B ratio is 12.79 compared to MELI's P/B of 17.06, further supporting EXPE's more attractive valuation metrics [6] Group 3: Value Grades - EXPE has earned a Value grade of B, while MELI has a Value grade of D, reflecting the stronger valuation metrics and estimate revision activity for EXPE [6][7] - Overall, value investors are likely to conclude that EXPE is the superior option compared to MELI at this time [7]