NXGN or TRHC: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Medical Info Systems sector might want to consider either Nextgen Healthcare (NXGN) or Tabula Rasa Healthcare (TRHC). 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Nextgen Healthcare and Tabula Rasa Healthcare are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that NXGN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
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.
NXGN currently has a forward P/E ratio of 22.32, while TRHC has a forward P/E of 140.18. We also note that NXGN has a PEG ratio of 2.59. 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. TRHC currently has a PEG ratio of 5.61.
Another notable valuation metric for NXGN is its P/B ratio of 3.45. 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, TRHC has a P/B of 6.60.
These are just a few of the metrics contributing to NXGN's Value grade of B and TRHC's Value grade of F.
NXGN 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 NXGN is likely the superior value option right now.
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NEXTGEN HEALTHCARE, INC (NXGN) : Free Stock Analysis Report
Tabula Rasa Healthcare Inc. (TRHC) : Free Stock Analysis Report
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