QFIN vs. RKT: Which Stock Is the Better Value Option?
Investors with an interest in Technology Services stocks have likely encountered both Qifu Technology, Inc. (QFIN) and Rocket Companies (RKT). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Qifu Technology, Inc. is sporting a Zacks Rank of #2 (Buy), while Rocket Companies has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that QFIN likely has seen a stronger improvement to its earnings outlook than RKT has recently. But this is just one piece of the puzzle for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
QFIN currently has a forward P/E ratio of 3.61, while RKT has a forward P/E of 40.80. We also note that QFIN has a PEG ratio of 0.35. 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. RKT currently has a PEG ratio of 8.16.
Another notable valuation metric for QFIN is its P/B ratio of 0.84. 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, RKT has a P/B of 3.32.
These are just a few of the metrics contributing to QFIN's Value grade of A and RKT's Value grade of D.
QFIN stands above RKT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that QFIN is the superior value option right now.
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Qifu Technology, Inc. (QFIN) : Free Stock Analysis Report
Rocket Companies, Inc. (RKT) : Free Stock Analysis Report
