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APG or AFRM: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Business - Services sector might want to consider either APi (APG - Free Report) or Affirm Holdings (AFRM - 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.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

APi and Affirm Holdings are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that APG has an improving earnings outlook. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

APG currently has a forward P/E ratio of 17.34, while AFRM has a forward P/E of 90.07. We also note that APG has a PEG ratio of 0.95. 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. AFRM currently has a PEG ratio of 30.58.

Another notable valuation metric for APG is its P/B ratio of 2.86. 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, AFRM has a P/B of 2.90.

These are just a few of the metrics contributing to APG's Value grade of B and AFRM's Value grade of F.

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


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