Investors with an interest in Computer - Services stocks have likely encountered both Perficient (PRFT) and Forrester Research (FORR). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Perficient and Forrester Research are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that PRFT likely has seen a stronger improvement to its earnings outlook than FORR has recently. However, value investors will care about much more than just this.
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 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.
PRFT currently has a forward P/E ratio of 16.58, while FORR has a forward P/E of 30.33. We also note that PRFT has a PEG ratio of 1.62. 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. FORR currently has a PEG ratio of 2.53.
Another notable valuation metric for PRFT is its P/B ratio of 2.63. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FORR has a P/B of 5.86.
Based on these metrics and many more, PRFT holds a Value grade of B, while FORR has a Value grade of F.
PRFT 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 PRFT is likely the superior value option right now.
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