Investors interested in stocks from the Computers - IT Services sector have probably already heard of Computer Task Group (CTG) and Epam (EPAM). 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.
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.
Both Computer Task Group and Epam have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
CTG currently has a forward P/E ratio of 15.28, while EPAM has a forward P/E of 39.17. We also note that CTG has a PEG ratio of 1.02. 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. EPAM currently has a PEG ratio of 1.96.
Another notable valuation metric for CTG is its P/B ratio of 1.22. 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, EPAM has a P/B of 7.72.
Based on these metrics and many more, CTG holds a Value grade of A, while EPAM has a Value grade of D.
Both CTG and EPAM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CTG is the superior value option right now.
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Computer Task Group, Incorporated (CTG) : Free Stock Analysis Report
EPAM Systems, Inc. (EPAM) : Free Stock Analysis Report
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