CPSI or QSII: Which Is the Better Value Stock Right Now?
Investors interested in Medical Info Systems stocks are likely familiar with Computer Programs and Systems (CPSI) and Quality Systems (QSII). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Computer Programs and Systems is sporting a Zacks Rank of #1 (Strong Buy), while Quality Systems has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CPSI is likely seeing its earnings outlook improve to a greater extent. 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.
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.
CPSI currently has a forward P/E ratio of 16.60, while QSII has a forward P/E of 32.34. We also note that CPSI has a PEG ratio of 1.56. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. QSII currently has a PEG ratio of 3.98.
Another notable valuation metric for CPSI is its P/B ratio of 3.25. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, QSII has a P/B of 3.84.
Based on these metrics and many more, CPSI holds a Value grade of B, while QSII has a Value grade of C.
CPSI sticks out from QSII in both our Zacks Rank and Style Scores models, so value investors will likely feel that CPSI is the better option right now.
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Computer Programs and Systems, Inc. (CPSI) : Free Stock Analysis Report
Quality Systems, Inc. (QSII) : Free Stock Analysis Report
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