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GFN or WNS: Which Is the Better Value Stock Right Now?

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Zacks Equity Research
·2 min read
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Investors looking for stocks in the Business - Services sector might want to consider either General Finance (GFN) or WNS Holdings Limited (WNS). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

General Finance has a Zacks Rank of #2 (Buy), while WNS Holdings Limited has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that GFN likely has seen a stronger improvement to its earnings outlook than WNS has recently. But this is only part of the picture for value investors.

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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

GFN currently has a forward P/E ratio of 19.78, while WNS has a forward P/E of 27.63. We also note that GFN has a PEG ratio of 1.65. 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. WNS currently has a PEG ratio of 3.65.

Another notable valuation metric for GFN is its P/B ratio of 1.98. 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, WNS has a P/B of 5.31.

These are just a few of the metrics contributing to GFN's Value grade of A and WNS's Value grade of C.

GFN stands above WNS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GFN is the superior value option right now.

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General Finance Corporation (GFN) : Free Stock Analysis Report
WNS Holdings Limited (WNS) : Free Stock Analysis Report
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