Investors with an interest in Communication - Components stocks have likely encountered both Corning (GLW) and Vocera Communications (VCRA). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Corning is sporting a Zacks Rank of #2 (Buy), while Vocera Communications has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GLW is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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 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.
GLW currently has a forward P/E ratio of 17.75, while VCRA has a forward P/E of 76.25. We also note that GLW has a PEG ratio of 2.17. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. VCRA currently has a PEG ratio of 4.08.
Another notable valuation metric for GLW is its P/B ratio of 2.14. 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, VCRA has a P/B of 6.28.
Based on these metrics and many more, GLW holds a Value grade of B, while VCRA has a Value grade of F.
GLW is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GLW is likely the superior value option right now.
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Corning Incorporated (GLW) : Free Stock Analysis Report
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