The shares of T. Rowe Price Group, Inc. (NASDAQ:TROW) and Web.com Group, Inc. (NASDAQ:WEB) were among the active stocks of the last trading sessions. T. Rowe Price Group, Inc. (NASDAQ:TROW) declined to -2.99% closing at the price of $98.51 whereas the shares of Web.com Group, Inc. (NASDAQ:WEB) soared 0% with the increase of 0 points closing at the price of $27.99. T. Rowe Price Group, Inc. has currently decrease -8.03% in its stock over the period of 6-months while its rival Web.com Group, Inc. added 52.95% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of T. Rowe Price Group, Inc. (NASDAQ:TROW) is 21.6% while the ROI of Web.com Group, Inc. (NASDAQ:WEB) is 6.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, TROW’s EBITDA Margin is 10.75 whereas WEB’s is 13.78.
Both the profitability ratios suggest a mixed sentiment for T. Rowe Price Group, Inc. (NASDAQ:TROW) and Web.com Group, Inc. (NASDAQ:WEB).
EPS & Surprise Factor
T. Rowe Price Group, Inc. (NASDAQ:TROW) reported $1.77/share EPS for the previous quarter where analysts were predicting an EPS to be $1.8/share Thus lagging the analyst Estimates with a Surprise Factor of -1.7 Percent. While, Web.com Group, Inc. (NASDAQ:WEB) reported EPS of $0.71/share in the last quarter. The analysts projected EPS of $0.64/share depicting a Surprise of 10.9 Percent.
Taking a look at Earnings per Share, Web.com Group, Inc. tends to be beating the analyst estimates more than T. Rowe Price Group, Inc.. so WEB is more profitable than TROW.
Technical Analysis of T. Rowe Price Group, Inc. & Web.com Group, Inc.
Moving average convergence divergence (MACD) shows that T. Rowe Price Group, Inc. (NASDAQ:TROW) is on a PRICE RELATIVITY trend While Web.com Group, Inc. (NASDAQ:WEB) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the T. Rowe Price Group, Inc. was in BEARISH territory and Web.com Group, Inc. was in BULLISH territory.
TROW’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While WEB’s candle is NEUTRAL with LOW.
EPS Growth Rate: TROW’s 14.81% versus WEB’s 5%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of T. Rowe Price Group, Inc. (NASDAQ:TROW) is predicted at 14.81% while Web.com Group, Inc. (NASDAQ:WEB) stands at 5%. These numbers suggest that TROW is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of TROW stands at 0 while WEB is at 0.5 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 2.13.
The values of the both ratios suggest that WEB is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.6 for TROW and 2.8 for WEB which means TROW has Hold rating whereas WEB has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for TROW is $129.25 which is 23.78% of its current price while WEB has price target of 25.8 which is -8.49% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
TROW currently has price to earning P/E ratio of 14.56 whereas WEB has 52.71 while the forward P/E ratio for the prior stands at 12.54 and for the later it depicts the value of 9.31.
The price to Book P/B for TROW is 3.9, Price to Sale is at 4.69 and for WEB these ratios stand at 4.45 and 1.87.