U.S. Markets closed

HPE vs. ZI: Which Stock Should Value Investors Buy Now?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Investors looking for stocks in the Computer - Integrated Systems sector might want to consider either Hewlett Packard Enterprise (HPE) or ZoomInfo (ZI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Hewlett Packard Enterprise and ZoomInfo are sporting Zacks Ranks of #1 (Strong 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 HPE has an improving earnings outlook. However, value investors will care about much more than just this.

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.

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.

HPE currently has a forward P/E ratio of 8.38, while ZI has a forward P/E of 81.03. We also note that HPE has a PEG ratio of 1.45. 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. ZI currently has a PEG ratio of 2.07.

Another notable valuation metric for HPE is its P/B ratio of 1.11. 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, ZI has a P/B of 11.61.

These metrics, and several others, help HPE earn a Value grade of A, while ZI has been given a Value grade of F.

HPE sticks out from ZI in both our Zacks Rank and Style Scores models, so value investors will likely feel that HPE is the better option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
 
ZoomInfo Technologies Inc. (ZI) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research