BCOR or SWCH: Which Is the Better Value Stock Right Now?
Investors interested in Technology Services stocks are likely familiar with Blucora (BCOR) and Switch (SWCH). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Blucora and Switch are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture 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.
BCOR currently has a forward P/E ratio of 13.56, while SWCH has a forward P/E of 80.88. We also note that BCOR has a PEG ratio of 0.68. 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. SWCH currently has a PEG ratio of 7.
Another notable valuation metric for BCOR is its P/B ratio of 2.15. 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, SWCH has a P/B of 4.78.
Based on these metrics and many more, BCOR holds a Value grade of A, while SWCH has a Value grade of D.
Both BCOR and SWCH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BCOR is the superior value option right now.
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Blucora, Inc. (BCOR) : Free Stock Analysis Report
Switch, Inc. (SWCH) : Free Stock Analysis Report
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