NXGN vs. TRHC: Which Stock Is the Better Value Option?
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.
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 just one piece of the puzzle 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 16.47, while TRHC has a forward P/E of 230.10. We also note that NXGN has a PEG ratio of 2.06. 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 6.39.
Another notable valuation metric for NXGN is its P/B ratio of 2.16. 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 6.40.
These metrics, and several others, help NXGN earn a Value grade of B, while TRHC has been given a Value grade of D.
NXGN has seen stronger estimate revision activity and sports more attractive valuation metrics than TRHC, so it seems like value investors will conclude that NXGN is the superior 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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