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CRM vs. SPOT: Which Stock Is the Better Value Option?
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Investors with an interest in Internet - Software stocks have likely encountered both Salesforce (CRM - Free Report) and Spotify (SPOT - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Salesforce has a Zacks Rank of #2 (Buy), while Spotify has a Zacks Rank of #3 (Hold) right now. This means that CRM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
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.
CRM currently has a forward P/E ratio of 14.11, while SPOT has a forward P/E of 30.19. We also note that CRM has a PEG ratio of 0.95. 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. SPOT currently has a PEG ratio of 1.08.
Another notable valuation metric for CRM is its P/B ratio of 2.89. 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, SPOT has a P/B of 9.62.
Based on these metrics and many more, CRM holds a Value grade of B, while SPOT has a Value grade of C.
CRM has seen stronger estimate revision activity and sports more attractive valuation metrics than SPOT, so it seems like value investors will conclude that CRM is the superior option right now.
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CRM vs. SPOT: Which Stock Is the Better Value Option?
Investors with an interest in Internet - Software stocks have likely encountered both Salesforce (CRM - Free Report) and Spotify (SPOT - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Salesforce has a Zacks Rank of #2 (Buy), while Spotify has a Zacks Rank of #3 (Hold) right now. This means that CRM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
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.
CRM currently has a forward P/E ratio of 14.11, while SPOT has a forward P/E of 30.19. We also note that CRM has a PEG ratio of 0.95. 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. SPOT currently has a PEG ratio of 1.08.
Another notable valuation metric for CRM is its P/B ratio of 2.89. 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, SPOT has a P/B of 9.62.
Based on these metrics and many more, CRM holds a Value grade of B, while SPOT has a Value grade of C.
CRM has seen stronger estimate revision activity and sports more attractive valuation metrics than SPOT, so it seems like value investors will conclude that CRM is the superior option right now.