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

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Investors interested in Computer - Services stocks are likely familiar with CACI International (CACI - Free Report) and Forrester Research (FORR - 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.

Currently, CACI International has 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. 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.

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.

CACI currently has a forward P/E ratio of 15.79, while FORR has a forward P/E of 23.63. We also note that CACI has a PEG ratio of 1.61. 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 1.97.

Another notable valuation metric for CACI is its P/B ratio of 2.09. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FORR has a P/B of 4.45.

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

CACI sticks out from FORR in both our Zacks Rank and Style Scores models, so value investors will likely feel that CACI is the better option right now.


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