Investors interested in Technology Services stocks are likely familiar with Jacobs Solutions (J) and Amplitude, Inc. (AMPL). 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.
Right now, Jacobs Solutions is sporting a Zacks Rank of #2 (Buy), while Amplitude, Inc. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that J is likely seeing its earnings outlook improve to a greater extent. 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.
J currently has a forward P/E ratio of 18.33, while AMPL has a forward P/E of 121.14. We also note that J has a PEG ratio of 1.56. 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. AMPL currently has a PEG ratio of 3.13.
Another notable valuation metric for J is its P/B ratio of 3.21. 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, AMPL has a P/B of 3.69.
Based on these metrics and many more, J holds a Value grade of B, while AMPL has a Value grade of F.
J sticks out from AMPL in both our Zacks Rank and Style Scores models, so value investors will likely feel that J is the better option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Jacobs Solutions Inc. (J): Free Stock Analysis Report Amplitude, Inc. (AMPL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
