Yahoo Finance KD or VLTO: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Technology Services sector have probably already heard of Kyndryl Holdings, Inc. (KD) and Veralto (VLTO). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Kyndryl Holdings, Inc. is sporting a Zacks Rank of #1 (Strong Buy), while Veralto has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that KD likely has seen a stronger improvement to its earnings outlook than VLTO has recently. But this is only part of the picture 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.
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.
KD currently has a forward P/E ratio of 21.77, while VLTO has a forward P/E of 29.68. We also note that KD has a PEG ratio of 4.35. 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. VLTO currently has a PEG ratio of 4.55.
Another notable valuation metric for KD is its P/B ratio of 5.36. 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, VLTO has a P/B of 16.46.
These are just a few of the metrics contributing to KD's Value grade of A and VLTO's Value grade of C.
KD has seen stronger estimate revision activity and sports more attractive valuation metrics than VLTO, so it seems like value investors will conclude that KD is the superior option right now.
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Kyndryl Holdings, Inc. (KD) : Free Stock Analysis Report
Veralto Corporation (VLTO) : Free Stock Analysis Report
