Investors with an interest in Medical Services stocks have likely encountered both AMN Healthcare Services (AMN) and HealthEquity (HQY). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 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.
AMN Healthcare Services and HealthEquity are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AMN has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
AMN currently has a forward P/E ratio of 18.46, while HQY has a forward P/E of 57.51. We also note that AMN has a PEG ratio of 1.48. 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 2.88.
Another notable valuation metric for AMN is its P/B ratio of 3.98. 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, HQY has a P/B of 9.06.
Based on these metrics and many more, AMN holds a Value grade of B, while HQY has a Value grade of D.
AMN sticks out from HQY in both our Zacks Rank and Style Scores models, so value investors will likely feel that AMN is the better option right now.
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AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report
HealthEquity, Inc. (HQY) : Free Stock Analysis Report
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