Investors interested in Technology Services stocks are likely familiar with Skillsoft Corp. (SKIL) and MeridianLink (MLNK). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Skillsoft Corp. has a Zacks Rank of #1 (Strong Buy), while MeridianLink has a Zacks Rank of #3 (Hold) right now. This means that SKIL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
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.
SKIL currently has a forward P/E ratio of 4.27, while MLNK has a forward P/E of 54.76. We also note that SKIL has a PEG ratio of 0.43. 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. MLNK currently has a PEG ratio of 1.85.
Another notable valuation metric for SKIL is its P/B ratio of 3. 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, MLNK has a P/B of 3.95.
These metrics, and several others, help SKIL earn a Value grade of A, while MLNK has been given a Value grade of D.
SKIL stands above MLNK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SKIL is the superior value option right now.
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Skillsoft Corp. (SKIL): Free Stock Analysis Report MeridianLink, Inc. (MLNK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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