NVEE vs. IT: Which Stock Should Value Investors Buy Now?

IT NVEE

Investors with an interest in Consulting Services stocks have likely encountered both NV5 Holdings (NVEE - Free Report) and Gartner (IT - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

NV5 Holdings and Gartner are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that NVEE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

NVEE currently has a forward P/E ratio of 11.62, while IT has a forward P/E of 38.48. We also note that NVEE has a PEG ratio of 0.58. 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. IT currently has a PEG ratio of 3.01.

Another notable valuation metric for NVEE is its P/B ratio of 1.90. 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, IT has a P/B of 15.18.

These metrics, and several others, help NVEE earn a Value grade of A, while IT has been given a Value grade of D.

NVEE stands above IT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NVEE is the superior value option right now.

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