Back to top

Image: Bigstock

IQV vs. APP: 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 IQVIA Holdings (IQV - Free Report) or AppLovin (APP - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

IQVIA Holdings and AppLovin 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 IQV is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

IQV currently has a forward P/E ratio of 21.34, while APP has a forward P/E of 100.89. We also note that IQV has a PEG ratio of 1.44. 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. APP currently has a PEG ratio of 5.04.

Another notable valuation metric for IQV is its P/B ratio of 6.92. 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, APP has a P/B of 7.16.

Based on these metrics and many more, IQV holds a Value grade of B, while APP has a Value grade of D.

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

In-Depth Zacks Research for the Tickers Above

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

AppLovin Corporation (APP) - free report >>

IQVIA Holdings Inc. (IQV) - free report >>

Published in