PSFE or EFX: Which Is the Better Value Stock Right Now?
Investors interested in Financial Transaction Services stocks are likely familiar with Paysafe Limited (PSFE) and Equifax (EFX). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Paysafe Limited has a Zacks Rank of #1 (Strong Buy), while Equifax has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PSFE has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
PSFE currently has a forward P/E ratio of 4.73, while EFX has a forward P/E of 27.05. We also note that PSFE has a PEG ratio of 0.45. 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. EFX currently has a PEG ratio of 2.30.
Another notable valuation metric for PSFE is its P/B ratio of 0.77. 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, EFX has a P/B of 5.46.
These metrics, and several others, help PSFE earn a Value grade of B, while EFX has been given a Value grade of D.
PSFE 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 PSFE is likely the superior value option right now.
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Paysafe Limited (PSFE) : Free Stock Analysis Report
Equifax, Inc. (EFX) : Free Stock Analysis Report
