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JCI vs. AXON: Which Stock Is the Better Value Option?

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Investors interested in Security and Safety Services stocks are likely familiar with Johnson Controls (JCI - Free Report) and Axon Enterprise (AXON - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Johnson Controls has a Zacks Rank of #2 (Buy), while Axon Enterprise has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that JCI is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

JCI currently has a forward P/E ratio of 21.13, while AXON has a forward P/E of 122.83. We also note that JCI has a PEG ratio of 2.64. 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. AXON currently has a PEG ratio of 8.19.

Another notable valuation metric for JCI is its P/B ratio of 2.60. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, AXON has a P/B of 9.93.

These metrics, and several others, help JCI earn a Value grade of B, while AXON has been given a Value grade of F.

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


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