HSON or EXLS: Which Is the Better Value Stock Right Now?

EXLS HSON

Investors interested in stocks from the Outsourcing sector have probably already heard of Hudson Global (HSON - Free Report) and ExlService Holdings (EXLS - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Hudson Global has a Zacks Rank of #2 (Buy), while ExlService Holdings has a Zacks Rank of #3 (Hold). This means that HSON's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

HSON currently has a forward P/E ratio of 8.94, while EXLS has a forward P/E of 19.73. We also note that HSON has a PEG ratio of 0.45. 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. EXLS currently has a PEG ratio of 1.33.

Another notable valuation metric for HSON is its P/B ratio of 1.27. 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, EXLS has a P/B of 5.48.

These metrics, and several others, help HSON earn a Value grade of A, while EXLS has been given a Value grade of C.

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

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