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IQV vs. SSTI: Which Stock Should Value Investors Buy Now?

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Investors interested in Technology Services stocks are likely familiar with IQVIA Holdings (IQV - Free Report) and ShotSpotter (SSTI - Free Report) . 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, IQVIA Holdings has a Zacks Rank of #2 (Buy), while ShotSpotter has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IQV 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.

IQV currently has a forward P/E ratio of 26.17, while SSTI has a forward P/E of 331.54. We also note that IQV has a PEG ratio of 2.65. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SSTI currently has a PEG ratio of 16.58.

Another notable valuation metric for IQV is its P/B ratio of 5.23. 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, SSTI has a P/B of 9.68.

Based on these metrics and many more, IQV holds a Value grade of B, while SSTI has a Value grade of D.

IQV 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 IQV is likely the superior value option right now.


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