Yahoo Finance HSTM vs. ZS: Which Stock Is the Better Value Option?
Investors interested in stocks from the Internet - Services sector have probably already heard of HealthStream (HSTM) and Zscaler (ZS). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, HealthStream is sporting a Zacks Rank of #2 (Buy), while Zscaler has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that HSTM likely has seen a stronger improvement to its earnings outlook than ZS has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
HSTM currently has a forward P/E ratio of 49.54, while ZS has a forward P/E of 55.91. We also note that HSTM has a PEG ratio of 4.13. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ZS currently has a PEG ratio of 7.30.
Another notable valuation metric for HSTM is its P/B ratio of 2.43. 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, ZS has a P/B of 22.17.
Based on these metrics and many more, HSTM holds a Value grade of B, while ZS has a Value grade of D.
HSTM stands above ZS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HSTM is the superior value option right now.
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HealthStream, Inc. (HSTM) : Free Stock Analysis Report
Zscaler, Inc. (ZS) : Free Stock Analysis Report
