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CDW vs. NOW: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Computers - IT Services sector might want to consider either CDW (CDW - Free Report) or ServiceNow (NOW - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
CDW and ServiceNow are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CDW is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
CDW currently has a forward P/E ratio of 24.93, while NOW has a forward P/E of 113.38. We also note that CDW has a PEG ratio of 1.90. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NOW currently has a PEG ratio of 4.
Another notable valuation metric for CDW is its P/B ratio of 31.59. 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, NOW has a P/B of 37.89.
These metrics, and several others, help CDW earn a Value grade of B, while NOW has been given a Value grade of D.
CDW has seen stronger estimate revision activity and sports more attractive valuation metrics than NOW, so it seems like value investors will conclude that CDW is the superior option right now.
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CDW vs. NOW: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Computers - IT Services sector might want to consider either CDW (CDW - Free Report) or ServiceNow (NOW - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
CDW and ServiceNow are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CDW is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
CDW currently has a forward P/E ratio of 24.93, while NOW has a forward P/E of 113.38. We also note that CDW has a PEG ratio of 1.90. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NOW currently has a PEG ratio of 4.
Another notable valuation metric for CDW is its P/B ratio of 31.59. 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, NOW has a P/B of 37.89.
These metrics, and several others, help CDW earn a Value grade of B, while NOW has been given a Value grade of D.
CDW has seen stronger estimate revision activity and sports more attractive valuation metrics than NOW, so it seems like value investors will conclude that CDW is the superior option right now.