Investors looking for stocks in the Technology Services sector might want to consider either Blucora (BCOR) or Futu Holdings Limited Sponsored ADR (FUTU). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
Right now, Blucora is sporting a Zacks Rank of #2 (Buy), while Futu Holdings Limited Sponsored ADR 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 BCOR has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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 10.22, while FUTU has a forward P/E of 20.66. We also note that BCOR has a PEG ratio of 0.68. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FUTU currently has a PEG ratio of 0.87.
Another notable valuation metric for BCOR is its P/B ratio of 2.42. 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, FUTU has a P/B of 2.71.
Based on these metrics and many more, BCOR holds a Value grade of A, while FUTU has a Value grade of C.
BCOR has seen stronger estimate revision activity and sports more attractive valuation metrics than FUTU, so it seems like value investors will conclude that BCOR is the superior option right now.
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Blucora, Inc. (BCOR) : Free Stock Analysis Report
Futu Holdings Limited Sponsored ADR (FUTU) : Free Stock Analysis Report
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