Investors with an interest in Medical Info Systems stocks have likely encountered both Syneos Health (SYNH) and Cerner (CERN). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Syneos Health has a Zacks Rank of #2 (Buy), while Cerner has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SYNH likely has seen a stronger improvement to its earnings outlook than CERN has recently. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
SYNH currently has a forward P/E ratio of 16.02, while CERN has a forward P/E of 25.61. We also note that SYNH has a PEG ratio of 1.53. 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. CERN currently has a PEG ratio of 1.76.
Another notable valuation metric for SYNH is its P/B ratio of 1.87. 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, CERN has a P/B of 4.62.
These metrics, and several others, help SYNH earn a Value grade of A, while CERN has been given a Value grade of C.
SYNH sticks out from CERN in both our Zacks Rank and Style Scores models, so value investors will likely feel that SYNH is the better option right now.
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INC Research Holdings, Inc. (SYNH) : Free Stock Analysis Report
Cerner Corporation (CERN) : Free Stock Analysis Report
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