Back to top

Image: Bigstock

CACI vs. FORR: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in Computer - Services stocks are likely familiar with CACI International (CACI - Free Report) and Forrester Research (FORR - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

CACI International and Forrester Research are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CACI likely has seen a stronger improvement to its earnings outlook than FORR has recently. But this is just one piece of the puzzle 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

CACI currently has a forward P/E ratio of 19.39, while FORR has a forward P/E of 41.76. We also note that CACI has a PEG ratio of 1.94. 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. FORR currently has a PEG ratio of 3.48.

Another notable valuation metric for CACI is its P/B ratio of 2.13. 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, FORR has a P/B of 5.61.

These are just a few of the metrics contributing to CACI's Value grade of A and FORR's Value grade of C.

CACI 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 CACI is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


CACI International, Inc. (CACI) - free report >>

Forrester Research, Inc. (FORR) - free report >>