Investors interested in Technology Services stocks are likely familiar with Vontier Corporation (VNT) and Duolingo, Inc. (DUOL). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Vontier Corporation is sporting a Zacks Rank of #2 (Buy), while Duolingo, Inc. has a Zacks Rank of #3 (Hold). This means that VNT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
VNT currently has a forward P/E ratio of 13.55, while DUOL has a forward P/E of 109.14. We also note that VNT has a PEG ratio of 1.42. 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. DUOL currently has a PEG ratio of 2.27.
Another notable valuation metric for VNT is its P/B ratio of 5.18. 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, DUOL has a P/B of 15.96.
Based on these metrics and many more, VNT holds a Value grade of B, while DUOL has a Value grade of F.
VNT has seen stronger estimate revision activity and sports more attractive valuation metrics than DUOL, so it seems like value investors will conclude that VNT is the superior option right now.
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Vontier Corporation (VNT): Free Stock Analysis Report Duolingo, Inc. (DUOL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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