Investors looking for stocks in the Computer - Services sector might want to consider either CACI International (CACI) or Forrester Research (FORR). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
CACI International and Forrester Research are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that CACI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CACI currently has a forward P/E ratio of 17.52, while FORR has a forward P/E of 30.41. We also note that CACI has a PEG ratio of 1.75. 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. FORR currently has a PEG ratio of 2.53.
Another notable valuation metric for CACI is its P/B ratio of 2.25. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FORR has a P/B of 6.25.
Based on these metrics and many more, CACI holds a Value grade of A, while FORR has a Value grade of C.
CACI has seen stronger estimate revision activity and sports more attractive valuation metrics than FORR, so it seems like value investors will conclude that CACI is the superior option right now.
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CACI International, Inc. (CACI) : Free Stock Analysis Report
Forrester Research, Inc. (FORR) : Free Stock Analysis Report
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