Yahoo Finance TMUS vs. CMBM: Which Stock Is the Better Value Option?
Investors interested in stocks from the Wireless National sector have probably already heard of T-Mobile (TMUS) and Cambium (CMBM). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, T-Mobile is sporting a Zacks Rank of #2 (Buy), while Cambium has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that TMUS likely has seen a stronger improvement to its earnings outlook than CMBM has recently. But this is just one piece of the puzzle for value investors.
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.
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.
TMUS currently has a forward P/E ratio of 21.41, while CMBM has a forward P/E of 24.80. We also note that TMUS has a PEG ratio of 0.68. 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. CMBM currently has a PEG ratio of 1.55.
Another notable valuation metric for TMUS is its P/B ratio of 2.55. 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, CMBM has a P/B of 4.36.
These metrics, and several others, help TMUS earn a Value grade of B, while CMBM has been given a Value grade of C.
TMUS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TMUS is likely the superior value option right now.
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T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report
Cambium Networks Corporation (CMBM) : Free Stock Analysis Report