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NVEE vs. IT: Which Stock Is the Better Value Option?

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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 companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Both NV5 Holdings and Gartner have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.

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 21.67, while IT has a forward P/E of 37.06. We also note that NVEE has a PEG ratio of 1.58. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IT currently has a PEG ratio of 3.71.

Another notable valuation metric for NVEE is its P/B ratio of 2.43. 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, IT has a P/B of 13.17.

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

Both NVEE and IT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NVEE is the superior value option right now.


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