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S vs. AQ: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Wireless National sector have probably already heard of Sprint (S - Free Report) and Aquantia . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Currently, Sprint has a Zacks Rank of #2 (Buy), while Aquantia has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that S likely has seen a stronger improvement to its earnings outlook than AQ has recently. 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.

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.

S currently has a forward P/E ratio of 98.60, while AQ has a forward P/E of 867. We also note that S has a PEG ratio of 5.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AQ currently has a PEG ratio of 34.68.

Another notable valuation metric for S is its P/B ratio of 0.82. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AQ has a P/B of 3.13.

Based on these metrics and many more, S holds a Value grade of A, while AQ has a Value grade of F.

S sticks out from AQ in both our Zacks Rank and Style Scores models, so value investors will likely feel that S is the better option right now.


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