Investors interested in Medical Services stocks are likely familiar with AMN Healthcare Services (AMN - Free Report) and HealthEquity (HQY - 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, both AMN Healthcare Services and HealthEquity 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 piece of the puzzle for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
AMN currently has a forward P/E ratio of 20.04, while HQY has a forward P/E of 43.92. We also note that AMN has a PEG ratio of 1.60. 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. HQY currently has a PEG ratio of 1.75.
Another notable valuation metric for AMN is its P/B ratio of 4.46. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HQY has a P/B of 4.58.
These metrics, and several others, help AMN earn a Value grade of B, while HQY has been given a Value grade of D.
Both AMN and HQY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AMN is the superior value option right now.