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CPSI vs. QSII: Which Stock Is the Better Value Option?

Zacks Equity Research
CWCO vs. GWRS: Which Stock Is the Better Value Option?

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 stocks offers value investors a better bang for their buck right now? We'll need to 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Computer Programs and Systems and Quality Systems are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. 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 only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

CPSI currently has a forward P/E ratio of 14.45, while QSII has a forward P/E of 26.27. We also note that CPSI has a PEG ratio of 1.36. 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 3.23.

Another notable valuation metric for CPSI is its P/B ratio of 3.32. 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, QSII has a P/B of 3.85.

These metrics, and several others, help CPSI earn a Value grade of B, while QSII has been given 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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