Back to top

Image: Bigstock

VSTA vs. MLNK: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Technology Services sector might want to consider either Vasta Platform Limited (VSTA - Free Report) or MeridianLink (MLNK - 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Vasta Platform Limited and MeridianLink are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that VSTA likely has seen a stronger improvement to its earnings outlook than MLNK has recently. But this is just one factor that value investors are interested in.

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.

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.

VSTA currently has a forward P/E ratio of 16.89, while MLNK has a forward P/E of 37.12. We also note that VSTA has a PEG ratio of 0.58. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MLNK currently has a PEG ratio of 0.87.

Another notable valuation metric for VSTA is its P/B ratio of 0.57. 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, MLNK has a P/B of 2.78.

Based on these metrics and many more, VSTA holds a Value grade of B, while MLNK has a Value grade of C.

VSTA 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 VSTA is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Vasta Platform Limited (VSTA) - free report >>

MeridianLink, Inc. (MLNK) - free report >>

Published in