Investors interested in Computer - Services stocks are likely familiar with Perficient (PRFT) and CGI Group (GIB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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.
Perficient has a Zacks Rank of #2 (Buy), while CGI Group has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that PRFT likely has seen a stronger improvement to its earnings outlook than GIB has recently. But this is only part of the picture 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.
PRFT currently has a forward P/E ratio of 18.62, while GIB has a forward P/E of 19.94. We also note that PRFT has a PEG ratio of 1.73. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GIB currently has a PEG ratio of 2.16.
Another notable valuation metric for PRFT is its P/B ratio of 3.42. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GIB has a P/B of 4.29.
These are just a few of the metrics contributing to PRFT's Value grade of B and GIB's Value grade of C.
PRFT has seen stronger estimate revision activity and sports more attractive valuation metrics than GIB, so it seems like value investors will conclude that PRFT is the superior option right now.
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Perficient, Inc. (PRFT) : Free Stock Analysis Report
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