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NXGN vs. TRHC: Which Stock Is the Better Value Option?

Zacks Equity Research
Northrop Grumman (NOC) closed the most recent trading day at $322.16, moving +0.32% from the previous trading session.

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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Nextgen Healthcare has a Zacks Rank of #2 (Buy), while Tabula Rasa Healthcare has a Zacks Rank of #4 (Sell) 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 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

NXGN currently has a forward P/E ratio of 22.07, while TRHC has a forward P/E of 112.75. We also note that NXGN has a PEG ratio of 2.50. 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. TRHC currently has a PEG ratio of 4.51.

Another notable valuation metric for NXGN is its P/B ratio of 3.42. 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, TRHC has a P/B of 5.31.

Based on these metrics and many more, NXGN holds a Value grade of B, while TRHC has a 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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