HSON vs. EXLS: Which Stock Is the Better Value Option?
Investors interested in stocks from the Outsourcing sector have probably already heard of Hudson Global (HSON) and ExlService Holdings (EXLS). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Hudson Global and ExlService Holdings 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 HSON has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
HSON currently has a forward P/E ratio of 7.36, while EXLS has a forward P/E of 22.90. We also note that HSON has a PEG ratio of 0.37. 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. EXLS currently has a PEG ratio of 1.52.
Another notable valuation metric for HSON is its P/B ratio of 1.38. 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, EXLS has a P/B of 6.57.
These metrics, and several others, help HSON earn a Value grade of A, while EXLS has been given a Value grade of C.
HSON sticks out from EXLS in both our Zacks Rank and Style Scores models, so value investors will likely feel that HSON is the better option right now.
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Hudson Global, Inc. (HSON) : Free Stock Analysis Report
ExlService Holdings, Inc. (EXLS) : Free Stock Analysis Report
