The shares of K2M Group Holdings, Inc. (NASDAQ:KTWO) and Wynn Resorts, Limited (NASDAQ:WYNN) were among the active stocks of the last trading sessions. K2M Group Holdings, Inc. (NASDAQ:KTWO) soared to 2.08% closing at the price of $27.5 whereas the shares of Wynn Resorts, Limited (NASDAQ:WYNN) declined -13.13% with the decrease of -14.97 points closing at the price of $99.02. K2M Group Holdings, Inc. has currently increase 31.64% in its stock over the period of 6-months while its rival Wynn Resorts, Limited subtracted -49.39% 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 K2M Group Holdings, Inc. (NASDAQ:KTWO) is -10.1% while the ROI of Wynn Resorts, Limited (NASDAQ:WYNN) is 9.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, KTWO’s EBITDA Margin is -95.31 whereas WYNN’s is 10.05.
Both the profitability ratios suggest that Wynn Resorts, Limited (NASDAQ:WYNN) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
K2M Group Holdings, Inc. (NASDAQ:KTWO) reported $-0.29/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.17/share Thus lagging the analyst Estimates with a Surprise Factor of -70.6 Percent. While, Wynn Resorts, Limited (NASDAQ:WYNN) reported EPS of $1.68/share in the last quarter. The analysts projected EPS of $1.69/share depicting a Surprise of -0.6 Percent.
Taking a look at Earnings per Share, Wynn Resorts, Limited tends to be beating the analyst estimates more than K2M Group Holdings, Inc.. so WYNN is more profitable than KTWO.
Technical Analysis of K2M Group Holdings, Inc. & Wynn Resorts, Limited
Moving average convergence divergence (MACD) shows that K2M Group Holdings, Inc. (NASDAQ:KTWO) is on a PRICE RELATIVITY trend While Wynn Resorts, Limited (NASDAQ:WYNN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the K2M Group Holdings, Inc. was in BEARISH territory and Wynn Resorts, Limited was in BULLISH territory.
KTWO’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While WYNN’s candle is BULLISH with HIGH.
EPS Growth Rate: KTWO’s 11% versus WYNN’s 14%
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 K2M Group Holdings, Inc. (NASDAQ:KTWO) is predicted at 11% while Wynn Resorts, Limited (NASDAQ:WYNN) stands at 14%. These numbers suggest that WYNN 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 KTWO stands at 3.5 while WYNN is at 1.1 whereas the debt ratio of the prior is 0.52 while the debt ratio of the later is 4.85.
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 3 for KTWO and 2.4 for WYNN which means KTWO has Hold rating whereas WYNN 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 KTWO is $26.63 which is -3.27% of its current price while WYNN has price target of 169.13 which is 41.45% 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.
KTWO currently has price to earning P/E ratio of 0 whereas WYNN has 58.45 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 11.92.
The price to Book P/B for KTWO is 4.88, Price to Sale is at 4.52 and for WYNN these ratios stand at 6.23 and 1.64.