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NXGN or TRHC: Which Is the Better Value Stock Right Now?

·2 min read

Investors with an interest in Medical Info Systems stocks have likely encountered both Nextgen Healthcare (NXGN) and 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.

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 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, Nextgen Healthcare is sporting a Zacks Rank of #2 (Buy), while Tabula Rasa Healthcare has a Zacks Rank of #3 (Hold). 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

NXGN currently has a forward P/E ratio of 14.94, while TRHC has a forward P/E of 201.12. We also note that NXGN has a PEG ratio of 1.87. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TRHC currently has a PEG ratio of 5.59.

Another notable valuation metric for NXGN is its P/B ratio of 1.96. 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 5.10.

These are just a few of the metrics contributing to NXGN's Value grade of B and TRHC's Value grade of D.

NXGN stands above TRHC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NXGN is 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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Zacks Investment Research