ARRY or ENPH: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Solar sector have probably already heard of Array Technologies, Inc. (ARRY) and Enphase Energy (ENPH). 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.
Right now, Array Technologies, Inc. is sporting a Zacks Rank of #2 (Buy), while Enphase Energy 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 ARRY has an improving earnings outlook. However, value investors will care about much more than just this.
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.
ARRY currently has a forward P/E ratio of 19.83, while ENPH has a forward P/E of 23.45. We also note that ARRY has a PEG ratio of 0.39. 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. ENPH currently has a PEG ratio of 1.15.
Another notable valuation metric for ARRY is its P/B ratio of 10.67. 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, ENPH has a P/B of 16.43.
These are just a few of the metrics contributing to ARRY's Value grade of B and ENPH's Value grade of D.
ARRY stands above ENPH thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ARRY is the superior value option right now.
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Array Technologies, Inc. (ARRY) : Free Stock Analysis Report
Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report
