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APG vs. AFRM: Which Stock Is the Better Value Option?

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Investors interested in Business - Services stocks are likely familiar with APi (APG - Free Report) and Affirm Holdings (AFRM - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both APi and Affirm Holdings are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

APG currently has a forward P/E ratio of 22.22, while AFRM has a forward P/E of 154.17. We also note that APG has a PEG ratio of 1.33. 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. AFRM currently has a PEG ratio of 10.56.

Another notable valuation metric for APG is its P/B ratio of 3.67. 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 6.03.

These metrics, and several others, help APG earn a Value grade of A, while AFRM has been given a Value grade of D.

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


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