ALIT vs. INFA: Which Stock Is the Better Value Option?
Investors looking for stocks in the Internet - Software sector might want to consider either Alight, Inc. (ALIT) or Informatica Inc. (INFA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Alight, Inc. has a Zacks Rank of #2 (Buy), while Informatica Inc. has a Zacks Rank of #3 (Hold) right now. This means that ALIT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
ALIT currently has a forward P/E ratio of 11.82, while INFA has a forward P/E of 30.89. We also note that ALIT has a PEG ratio of 0.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. INFA currently has a PEG ratio of 3.70.
Another notable valuation metric for ALIT is its P/B ratio of 1.02. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, INFA has a P/B of 5.19.
These are just a few of the metrics contributing to ALIT's Value grade of B and INFA's Value grade of D.
ALIT stands above INFA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ALIT is the superior value option right now.
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Alight, Inc. (ALIT) : Free Stock Analysis Report
Informatica Inc. (INFA) : Free Stock Analysis Report
