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Science Applications International Corporation (SAIC) - free report >>
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Science Applications International Corporation (SAIC) - free report >>
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SAIC vs. WIX: Which Stock Is the Better Value Option?
Investors interested in stocks from the Computers - IT Services sector have probably already heard of SAIC (SAIC - Free Report) and Wix.com (WIX - 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.
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.
SAIC has a Zacks Rank of #2 (Buy), while Wix.com has a Zacks Rank of #3 (Hold) right now. This means that SAIC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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 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.
SAIC currently has a forward P/E ratio of 13.76, while WIX has a forward P/E of 115.44. We also note that SAIC has a PEG ratio of 2.50. 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. WIX currently has a PEG ratio of 3.30.
Another notable valuation metric for SAIC is its P/B ratio of 3.53. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WIX has a P/B of 31.80.
These are just a few of the metrics contributing to SAIC's Value grade of B and WIX's Value grade of F.
SAIC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SAIC is likely the superior value option right now.