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NMRK vs. BEKE: Which Stock Is the Better Value Option?

Zacks Equity Research
·2-min read

Investors interested in Real Estate - Operations stocks are likely familiar with Newmark Group (NMRK) and KE Holdings Inc. Sponsored ADR (BEKE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Right now, Newmark Group is sporting a Zacks Rank of #2 (Buy), while KE Holdings Inc. Sponsored ADR has a Zacks Rank of #3 (Hold). This means that NMRK'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 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.

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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.

NMRK currently has a forward P/E ratio of 11.85, while BEKE has a forward P/E of 59.49. We also note that NMRK has a PEG ratio of 1.18. 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. BEKE currently has a PEG ratio of 5.05.

Another notable valuation metric for NMRK is its P/B ratio of 1.89. 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, BEKE has a P/B of 1.93.

These are just a few of the metrics contributing to NMRK's Value grade of A and BEKE's Value grade of C.

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


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Newmark Group, Inc. (NMRK) : Free Stock Analysis Report
 
KE Holdings Inc. Sponsored ADR (BEKE) : Free Stock Analysis Report
 
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Zacks Investment Research