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GFS or AMBA: Which Is the Better Value Stock Right Now?
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Investors interested in Electronics - Semiconductors stocks are likely familiar with GlobalFoundries Inc. (GFS - Free Report) and Ambarella (AMBA - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, GlobalFoundries Inc. is sporting a Zacks Rank of #2 (Buy), while Ambarella has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GFS has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
GFS currently has a forward P/E ratio of 24.21, while AMBA has a forward P/E of 70.27. We also note that GFS has a PEG ratio of 0.47. 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. AMBA currently has a PEG ratio of 8.35.
Another notable valuation metric for GFS is its P/B ratio of 3.57. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AMBA has a P/B of 5.88.
These metrics, and several others, help GFS earn a Value grade of B, while AMBA has been given a Value grade of F.
GFS stands above AMBA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GFS is the superior value option right now.
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GFS or AMBA: Which Is the Better Value Stock Right Now?
Investors interested in Electronics - Semiconductors stocks are likely familiar with GlobalFoundries Inc. (GFS - Free Report) and Ambarella (AMBA - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, GlobalFoundries Inc. is sporting a Zacks Rank of #2 (Buy), while Ambarella has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GFS has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
GFS currently has a forward P/E ratio of 24.21, while AMBA has a forward P/E of 70.27. We also note that GFS has a PEG ratio of 0.47. 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. AMBA currently has a PEG ratio of 8.35.
Another notable valuation metric for GFS is its P/B ratio of 3.57. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AMBA has a P/B of 5.88.
These metrics, and several others, help GFS earn a Value grade of B, while AMBA has been given a Value grade of F.
GFS stands above AMBA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GFS is the superior value option right now.