SIFY or SHOP: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Internet - Services sector have probably already heard of Sify Technologies Limited (SIFY) and Shopify (SHOP). 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.
Right now, Sify Technologies Limited is sporting a Zacks Rank of #2 (Buy), while Shopify has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SIFY is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
SIFY currently has a forward P/E ratio of 27.69, while SHOP has a forward P/E of 233.69. We also note that SIFY has a PEG ratio of 1.38. 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. SHOP currently has a PEG ratio of 7.26.
Another notable valuation metric for SIFY is its P/B ratio of 3.66. 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, SHOP has a P/B of 17.50.
Based on these metrics and many more, SIFY holds a Value grade of B, while SHOP has a Value grade of F.
SIFY stands above SHOP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SIFY is the superior value option right now.
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