Investors interested in Consulting Services stocks are likely familiar with CoreLogic (CLGX - Free Report) and Gartner (IT - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, CoreLogic is sporting a Zacks Rank of #2 (Buy), while Gartner has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CLGX likely has seen a stronger improvement to its earnings outlook than IT has recently. But this is just one piece of the puzzle for value investors.
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 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.
CLGX currently has a forward P/E ratio of 14.69, while IT has a forward P/E of 45.03. We also note that CLGX has a PEG ratio of 1.34. 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. IT currently has a PEG ratio of 3.53.
Another notable valuation metric for CLGX is its P/B ratio of 3.40. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, IT has a P/B of 15.56.
These metrics, and several others, help CLGX earn a Value grade of A, while IT has been given a Value grade of D.
CLGX has seen stronger estimate revision activity and sports more attractive valuation metrics than IT, so it seems like value investors will conclude that CLGX is the superior option right now.