Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Intercorp Financial Services Inc. (IFS) and SoFi Technologies, Inc. (SOFI). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Intercorp Financial Services Inc. is sporting a Zacks Rank of #1 (Strong Buy), while SoFi Technologies, Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that IFS likely has seen a stronger improvement to its earnings outlook than SOFI has recently. But this is just one piece of the puzzle 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 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.
IFS currently has a forward P/E ratio of 8.91, while SOFI has a forward P/E of 98.77. We also note that IFS has a PEG ratio of 0.37. 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. SOFI currently has a PEG ratio of 3.73.
Another notable valuation metric for IFS is its P/B ratio of 1.53. 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, SOFI has a P/B of 5.14.
These metrics, and several others, help IFS earn a Value grade of B, while SOFI has been given a Value grade of F.
IFS has seen stronger estimate revision activity and sports more attractive valuation metrics than SOFI, so it seems like value investors will conclude that IFS is the superior option right now.
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Intercorp Financial Services Inc. (IFS): Free Stock Analysis Report SoFi Technologies, Inc. (SOFI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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