CNXC vs. WNS: Which Stock Is the Better Value Option?
Investors with an interest in Business - Services stocks have likely encountered both Concentrix Corporation (CNXC) and WNS (Holdings) Limited (WNS). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, Concentrix Corporation is sporting a Zacks Rank of #1 (Strong Buy), while WNS (Holdings) Limited has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CNXC has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
CNXC currently has a forward P/E ratio of 7.07, while WNS has a forward P/E of 14.27. We also note that CNXC has a PEG ratio of 0.92. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WNS currently has a PEG ratio of 1.34.
Another notable valuation metric for CNXC is its P/B ratio of 1.66. 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, WNS has a P/B of 3.44.
These metrics, and several others, help CNXC earn a Value grade of A, while WNS has been given a Value grade of C.
CNXC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CNXC is likely the superior value option right now.
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Concentrix Corporation (CNXC) : Free Stock Analysis Report
WNS (Holdings) Limited (WNS) : Free Stock Analysis Report
