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Investors interested in stocks from the Technology Services sector have probably already heard of Qifu Technology, Inc. (QFIN) and Amplitude, Inc. (AMPL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Right now, Qifu Technology, Inc. is sporting a Zacks Rank of #1 (Strong Buy), while Amplitude, Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that QFIN likely has seen a stronger improvement to its earnings outlook than AMPL has recently. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
QFIN currently has a forward P/E ratio of 6.63, while AMPL has a forward P/E of 217.50. We also note that QFIN has a PEG ratio of 0.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AMPL currently has a PEG ratio of 5.24.
Another notable valuation metric for QFIN is its P/B ratio of 1.87. 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, AMPL has a P/B of 4.45.
Based on these metrics and many more, QFIN holds a Value grade of A, while AMPL has a Value grade of D.
QFIN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that QFIN is likely the superior value option right now.
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Qifu Technology, Inc. (QFIN) : Free Stock Analysis Report