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ATTO vs. EXLS: Which Stock Should Value Investors Buy Now?

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Investors interested in Outsourcing stocks are likely familiar with Atento and ExlService Holdings (EXLS - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Atento has a Zacks Rank of #1 (Strong Buy), while ExlService Holdings has a Zacks Rank of #3 (Hold) right now. This means that ATTO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

ATTO currently has a forward P/E ratio of 14.79, while EXLS has a forward P/E of 22.99. We also note that ATTO has a PEG ratio of 1.48. 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 2.33.

Another notable valuation metric for ATTO is its P/B ratio of 2.45. 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, EXLS has a P/B of 4.11.

Based on these metrics and many more, ATTO holds a Value grade of A, while EXLS has a Value grade of C.

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


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