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DXC or ACXM: Which Is the Better Value Stock Right Now?

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Investors interested in Computers - IT Services stocks are likely familiar with DXC Technology (DXC - Free Report) and Acxiom . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Currently, DXC Technology has a Zacks Rank of #2 (Buy), while Acxiom has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DXC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

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.

DXC currently has a forward P/E ratio of 10.76, while ACXM has a forward P/E of 47.91. We also note that DXC has a PEG ratio of 1.49. 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. ACXM currently has a PEG ratio of 4.79.

Another notable valuation metric for DXC is its P/B ratio of 2.11. 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, ACXM has a P/B of 4.77.

These are just a few of the metrics contributing to DXC's Value grade of A and ACXM's Value grade of F.

DXC stands above ACXM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DXC is the superior value option right now.


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