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Investors interested in stocks from the Business - Services sector have probably already heard of 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Concentrix Corporation and WNS Holdings Limited are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CNXC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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 16.94, while WNS has a forward P/E of 24.16. We also note that CNXC has a PEG ratio of 0.72. 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. WNS currently has a PEG ratio of 3.19.
Another notable valuation metric for CNXC is its P/B ratio of 3.37. 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, WNS has a P/B of 5.27.
These metrics, and several others, help CNXC earn a Value grade of B, while WNS has been given a Value grade of C.
CNXC has seen stronger estimate revision activity and sports more attractive valuation metrics than WNS, so it seems like value investors will conclude that CNXC is the superior option right now.
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Concentrix Corporation (CNXC) : Free Stock Analysis Report
WNS Holdings Limited (WNS) : Free Stock Analysis Report
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