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TMUS or IDSY: Which Is the Better Value Stock Right Now?

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Investors with an interest in Wireless National stocks have likely encountered both T-Mobile (TMUS - Free Report) and I.D. Systems . 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.

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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

T-Mobile and I.D. Systems 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 TMUS has an improving earnings 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 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.

TMUS currently has a forward P/E ratio of 19.40, while IDSY has a forward P/E of 48.40. We also note that TMUS has a PEG ratio of 1.49. 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. IDSY currently has a PEG ratio of 1.61.

Another notable valuation metric for TMUS is its P/B ratio of 2.54. 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, IDSY has a P/B of 3.71.

Based on these metrics and many more, TMUS holds a Value grade of B, while IDSY has a Value grade of F.

TMUS sticks out from IDSY in both our Zacks Rank and Style Scores models, so value investors will likely feel that TMUS is the better option right now.


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