S or AQ: Which Is the Better Value Stock Right Now?

S

Investors interested in Wireless National stocks are likely familiar with 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.

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.

Right now, Sprint is sporting a Zacks Rank of #2 (Buy), while Aquantia has a Zacks Rank of #3 (Hold). This means that S'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 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.

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.

S currently has a forward P/E ratio of 120.36, while AQ has a forward P/E of 963. We also note that S has a PEG ratio of 6.13. 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. AQ currently has a PEG ratio of 38.52.

Another notable valuation metric for S is its P/B ratio of 0.87. 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, AQ has a P/B of 3.47.

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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