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SPXC vs. CARG: Which Stock Is the Better Value Option?

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Investors interested in Automotive - Replacement Parts stocks are likely familiar with SPX (SPXC - Free Report) and CarGurus (CARG - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Currently, SPX has a Zacks Rank of #2 (Buy), while CarGurus has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SPXC has an improving earnings outlook. However, value investors will care about much more than just this.

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.

SPXC currently has a forward P/E ratio of 15.34, while CARG has a forward P/E of 63.77. We also note that SPXC has a PEG ratio of 1.53. 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. CARG currently has a PEG ratio of 1.77.

Another notable valuation metric for SPXC is its P/B ratio of 3.56. 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, CARG has a P/B of 10.26.

These are just a few of the metrics contributing to SPXC's Value grade of B and CARG's Value grade of F.

SPXC 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 SPXC is likely the superior value option right now.


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SPX Technologies, Inc. (SPXC) - free report >>

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