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CACI vs. FORR: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Computer - Services stocks have likely encountered both CACI International (CACI - Free Report) and Forrester Research (FORR - 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.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, CACI International is sporting a Zacks Rank of #2 (Buy), while Forrester Research has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CACI has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

CACI currently has a forward P/E ratio of 16.37, while FORR has a forward P/E of 23.72. We also note that CACI has a PEG ratio of 1.66. 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. FORR currently has a PEG ratio of 1.98.

Another notable valuation metric for CACI is its P/B ratio of 2.23. 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, FORR has a P/B of 4.46.

These metrics, and several others, help CACI earn a Value grade of B, while FORR has been given a Value grade of C.

CACI 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 CACI is likely the superior value option right now.


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