FC or IT: Which Is the Better Value Stock Right Now?
Investors with an interest in Consulting Services stocks have likely encountered both Franklin Covey (FC) and Gartner (IT). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Franklin Covey and Gartner 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 FC has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 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.
FC currently has a forward P/E ratio of 23.26, while IT has a forward P/E of 32.56. We also note that FC has a PEG ratio of 1.16. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IT currently has a PEG ratio of 4.51.
Another notable valuation metric for FC is its P/B ratio of 7.06. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, IT has a P/B of 44.31.
These metrics, and several others, help FC earn a Value grade of B, while IT has been given a Value grade of D.
FC has seen stronger estimate revision activity and sports more attractive valuation metrics than IT, so it seems like value investors will conclude that FC is the superior option right now.
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Franklin Covey Company (FC) : Free Stock Analysis Report
Gartner, Inc. (IT) : Free Stock Analysis Report
