Investors interested in stocks from the Computer - Services sector have probably already heard of Carbonite and Virtusa . 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.
Right now, Carbonite is sporting a Zacks Rank of #2 (Buy), while Virtusa has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CARB has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
CARB currently has a forward P/E ratio of 14.41, while VRTU has a forward P/E of 24. We also note that CARB has a PEG ratio of 0.72. 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. VRTU currently has a PEG ratio of 1.20.
Another notable valuation metric for CARB is its P/B ratio of 3.31. 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, VRTU has a P/B of 4.29.
Based on these metrics and many more, CARB holds a Value grade of B, while VRTU has a Value grade of C.
CARB stands above VRTU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CARB is the superior value option right now.
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CARB vs. VRTU: Which Stock Is the Better Value Option?
Investors interested in stocks from the Computer - Services sector have probably already heard of Carbonite and Virtusa . 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.
Right now, Carbonite is sporting a Zacks Rank of #2 (Buy), while Virtusa has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CARB has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
CARB currently has a forward P/E ratio of 14.41, while VRTU has a forward P/E of 24. We also note that CARB has a PEG ratio of 0.72. 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. VRTU currently has a PEG ratio of 1.20.
Another notable valuation metric for CARB is its P/B ratio of 3.31. 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, VRTU has a P/B of 4.29.
Based on these metrics and many more, CARB holds a Value grade of B, while VRTU has a Value grade of C.
CARB stands above VRTU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CARB is the superior value option right now.