Investors interested in Consumer Services - Miscellaneous stocks are likely familiar with SP Plus (SP - Free Report) and Care.com (CRCM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 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, SP Plus is sporting a Zacks Rank of #2 (Buy), while Care.com has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SP likely has seen a stronger improvement to its earnings outlook than CRCM has recently. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
SP currently has a forward P/E ratio of 17.18, while CRCM has a forward P/E of 31.75. We also note that SP has a PEG ratio of 1.91. 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. CRCM currently has a PEG ratio of 2.12.
Another notable valuation metric for SP is its P/B ratio of 2.67. 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, CRCM has a P/B of 6.85.
These metrics, and several others, help SP earn a Value grade of B, while CRCM has been given a Value grade of D.
SP stands above CRCM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SP is the superior value option right now.