Investors with an interest in Business - Services stocks have likely encountered both Core-Mark (CORE) and SPS Commerce (SPSC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Core-Mark and SPS Commerce are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CORE has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CORE currently has a forward P/E ratio of 24.73, while SPSC has a forward P/E of 46.71. We also note that CORE has a PEG ratio of 3.09. 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. SPSC currently has a PEG ratio of 3.11.
Another notable valuation metric for CORE is its P/B ratio of 3.18. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SPSC has a P/B of 5.57.
Based on these metrics and many more, CORE holds a Value grade of A, while SPSC has a Value grade of D.
CORE stands above SPSC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CORE is the superior value option right now.
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Core-Mark Holding Company, Inc. (CORE) : Free Stock Analysis Report
SPS Commerce, Inc. (SPSC) : Free Stock Analysis Report
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