The shares of Hilton Worldwide Holdings Inc. (NYSE:HLT) and Adobe Systems Incorporated (NASDAQ:ADBE) were among the active stocks of the last trading sessions. Hilton Worldwide Holdings Inc. (NYSE:HLT) declined to -1.3% closing at the price of $72.02 whereas the shares of Adobe Systems Incorporated (NASDAQ:ADBE) declined -1.37% with the decrease of -3.47 points closing at the price of $249.96. Hilton Worldwide Holdings Inc. has currently decrease -13.76% in its stock over the period of 6-months while its rival Adobe Systems Incorporated added 3.34% 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 Hilton Worldwide Holdings Inc. (NYSE:HLT) is 11.8% while the ROI of Adobe Systems Incorporated (NASDAQ:ADBE) is 16.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HLT’s EBITDA Margin is 15.71 whereas ADBE’s is 38.78.
Both the profitability ratios suggest that Adobe Systems Incorporated (NASDAQ:ADBE) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Hilton Worldwide Holdings Inc. (NYSE:HLT) reported $0.77/share EPS for the previous quarter where analysts were predicting an EPS to be $0.76/share Thus beating the analyst Estimates with a Surprise Factor of 1.3 Percent. While, Adobe Systems Incorporated (NASDAQ:ADBE) reported EPS of $1.73/share in the last quarter. The analysts projected EPS of $1.69/share depicting a Surprise of 2.4 Percent.
Taking a look at Earnings per Share, Adobe Systems Incorporated tends to be beating the analyst estimates more than Hilton Worldwide Holdings Inc.. so ADBE is more profitable than HLT.
Technical Analysis of Hilton Worldwide Holdings Inc. & Adobe Systems Incorporated
Moving average convergence divergence (MACD) shows that Hilton Worldwide Holdings Inc. (NYSE:HLT) is on a PRICE RELATIVITY trend While Adobe Systems Incorporated (NASDAQ:ADBE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Hilton Worldwide Holdings Inc. was in BULLISH territory and Adobe Systems Incorporated was in BULLISH territory.
HLT’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While ADBE’s candle is BEARISH with HIGH.
EPS Growth Rate: HLT’s 23.61% versus ADBE’s 32.6%
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 Hilton Worldwide Holdings Inc. (NYSE:HLT) is predicted at 23.61% while Adobe Systems Incorporated (NASDAQ:ADBE) stands at 32.6%. These numbers suggest that ADBE 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 HLT stands at 0.8 while ADBE is at 1.7 whereas the debt ratio of the prior is 13.2 while the debt ratio of the later is 0.21.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
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 1.9 for HLT and 2 for ADBE which means HLT has Buy rating whereas ADBE has Buy 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 HLT is $84.7 which is 14.97% of its current price while ADBE has price target of 290.35 which is 13.91% 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.
HLT currently has price to earning P/E ratio of 31.3 whereas ADBE has 47.19 while the forward P/E ratio for the prior stands at 22.59 and for the later it depicts the value of 31.34.
The price to Book P/B for HLT is 37.32, Price to Sale is at 2.4 and for ADBE these ratios stand at 13.83 and 14.57.