Investors with an interest in Computer - Services stocks have likely encountered both Perficient (PRFT) and Forrester Research (FORR). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Perficient has a Zacks Rank of #2 (Buy), while Forrester Research has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PRFT has an improving earnings 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.
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 16.98, while FORR has a forward P/E of 31.13. We also note that PRFT has a PEG ratio of 1.66. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FORR currently has a PEG ratio of 2.59.
Another notable valuation metric for PRFT is its P/B ratio of 2.70. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FORR has a P/B of 6.02.
These metrics, and several others, help PRFT earn a Value grade of B, while FORR has been given a Value grade of D.
PRFT has seen stronger estimate revision activity and sports more attractive valuation metrics than FORR, so it seems like value investors will conclude that PRFT is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Perficient, Inc. (PRFT) : Free Stock Analysis Report
Forrester Research, Inc. (FORR) : Free Stock Analysis Report
To read this article on Zacks.com click here.