Investors looking for stocks in the Computer - Services sector might want to consider either CACI International (CACI) or CGI Group (GIB). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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.
CACI International has a Zacks Rank of #2 (Buy), while CGI Group has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CACI has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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 20.48, while GIB has a forward P/E of 21.20. We also note that CACI has a PEG ratio of 2.05. 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. GIB currently has a PEG ratio of 2.26.
Another notable valuation metric for CACI is its P/B ratio of 2.59. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GIB has a P/B of 4.34.
These metrics, and several others, help CACI earn a Value grade of B, while GIB has been given a Value grade of C.
CACI stands above GIB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CACI is the superior value option right now.
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CACI International, Inc. (CACI) : Free Stock Analysis Report
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