TT or SSTI: Which Is the Better Value Stock Right Now?
Investors interested in Technology Services stocks are likely familiar with Trane Technologies (TT) and ShotSpotter (SSTI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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, Trane Technologies is sporting a Zacks Rank of #2 (Buy), while ShotSpotter has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that TT likely has seen a stronger improvement to its earnings outlook than SSTI 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
TT currently has a forward P/E ratio of 22.48, while SSTI has a forward P/E of 177.94. We also note that TT has a PEG ratio of 2.06. 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. SSTI currently has a PEG ratio of 5.93.
Another notable valuation metric for TT is its P/B ratio of 6.98. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SSTI has a P/B of 7.60.
These metrics, and several others, help TT earn a Value grade of B, while SSTI has been given a Value grade of F.
TT stands above SSTI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TT is the superior value option right now.
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Trane Technologies plc (TT) : Free Stock Analysis Report
ShotSpotter (SSTI) : Free Stock Analysis Report
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