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SMGZY vs. SSTI: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Technology Services sector might want to consider either Smiths Group PLC (SMGZY - Free Report) or ShotSpotter (SSTI - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Smiths Group PLC is sporting a Zacks Rank of #2 (Buy), while ShotSpotter has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that SMGZY likely has seen a stronger improvement to its earnings outlook than SSTI 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

SMGZY currently has a forward P/E ratio of 20.89, while SSTI has a forward P/E of 165.82. We also note that SMGZY has a PEG ratio of 6.11. 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. SSTI currently has a PEG ratio of 6.63.

Another notable valuation metric for SMGZY is its P/B ratio of 2.62. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SSTI has a P/B of 9.33.

These are just a few of the metrics contributing to SMGZY's Value grade of B and SSTI's Value grade of F.

SMGZY 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 SMGZY is likely the superior value option right now.


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