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WIT or TYL: Which Is the Better Value Stock Right Now?

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Investors with an interest in Business - Software Services stocks have likely encountered both Wipro Limited (WIT - Free Report) and Tyler Technologies (TYL - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Wipro Limited has a Zacks Rank of #2 (Buy), while Tyler Technologies has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that WIT has an improving earnings outlook. 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

WIT currently has a forward P/E ratio of 15.81, while TYL has a forward P/E of 65.94. We also note that WIT has a PEG ratio of 1.76. 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. TYL currently has a PEG ratio of 4.40.

Another notable valuation metric for WIT is its P/B ratio of 2.58. 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, TYL has a P/B of 7.92.

These metrics, and several others, help WIT earn a Value grade of A, while TYL has been given a Value grade of F.

WIT 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 WIT is likely the superior value option right now.


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