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

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·2 min read
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Investors looking for stocks in the Medical Info Systems sector might want to consider either Computer Programs and Systems (CPSI) or Tabula Rasa Healthcare (TRHC). 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 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 #2 (Buy), while Tabula Rasa Healthcare has a Zacks Rank of #3 (Hold). This means that CPSI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CPSI currently has a forward P/E ratio of 12.69, while TRHC has a forward P/E of 205.04. We also note that CPSI has a PEG ratio of 1.03. 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. TRHC currently has a PEG ratio of 5.70.

Another notable valuation metric for CPSI is its P/B ratio of 2.11. 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, TRHC has a P/B of 4.90.

These are just a few of the metrics contributing to CPSI's Value grade of B and TRHC's Value grade of D.

CPSI has seen stronger estimate revision activity and sports more attractive valuation metrics than TRHC, so it seems like value investors will conclude that CPSI is the superior option right now.


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Computer Programs and Systems, Inc. (CPSI) : Free Stock Analysis Report
 
Tabula Rasa Healthcare Inc. (TRHC) : Free Stock Analysis Report
 
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Zacks Investment Research