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FUTU vs. PLTR: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Technology Services sector might want to consider either Futu Holdings Limited Sponsored ADR (FUTU - Free Report) or Palantir Technologies Inc. (PLTR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both Futu Holdings Limited Sponsored ADR and Palantir Technologies Inc. have a Zacks Rank of # 1 (Strong Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

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.

FUTU currently has a forward P/E ratio of 13.56, while PLTR has a forward P/E of 77.58. We also note that FUTU has a PEG ratio of 0.79. 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. PLTR currently has a PEG ratio of 1.30.

Another notable valuation metric for FUTU is its P/B ratio of 3.09. 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, PLTR has a P/B of 12.77.

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

Both FUTU and PLTR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FUTU is the superior value option right now.


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