BCOR vs. STX: Which Stock Is the Better Value Option?

STX

Investors interested in Technology Services stocks are likely familiar with Blucora and Seagate (STX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Blucora has a Zacks Rank of #2 (Buy), while Seagate has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BCOR has an improving earnings outlook. 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.

BCOR currently has a forward P/E ratio of 10.43, while STX has a forward P/E of 11.31. We also note that BCOR has a PEG ratio of 0.70. 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. STX currently has a PEG ratio of 9.34.

Another notable valuation metric for BCOR is its P/B ratio of 2.34. 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, STX has a P/B of 123.60.

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

BCOR 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 BCOR is likely the superior value option right now.

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