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Investors interested in Technology Services stocks are likely familiar with NV5 Global (NVEE) and Amadeus IT Group SA Unsponsored ADR (AMADY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
NV5 Global and Amadeus IT Group SA Unsponsored ADR are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
NVEE currently has a forward P/E ratio of 14.77, while AMADY has a forward P/E of 22.75. We also note that NVEE has a PEG ratio of 2.80. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AMADY currently has a PEG ratio of 3.02.
Another notable valuation metric for NVEE is its P/B ratio of 1.50. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, AMADY has a P/B of 6.36.
These metrics, and several others, help NVEE earn a Value grade of B, while AMADY has been given a Value grade of D.
Both NVEE and AMADY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NVEE is the superior value option right now.
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NV5 Global, Inc. (NVEE) : Free Stock Analysis Report
Amadeus IT Group SA Unsponsored ADR (AMADY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).