Investors interested in stocks from the Technology Services sector have probably already heard of Qifu Technology, Inc. (QFIN) and Climb Global Solutions (CLMB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Currently, both Qifu Technology, Inc. and Climb Global Solutions are holding a Zacks Rank of # 1 (Strong Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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 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.
QFIN currently has a forward P/E ratio of 5.30, while CLMB has a forward P/E of 19.27. We also note that QFIN has a PEG ratio of 0.47. 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. CLMB currently has a PEG ratio of 1.61.
Another notable valuation metric for QFIN is its P/B ratio of 1.74. 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, CLMB has a P/B of 5.29.
These metrics, and several others, help QFIN earn a Value grade of A, while CLMB has been given a Value grade of C.
Both QFIN and CLMB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that QFIN is the superior value option right now.
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Qifu Technology, Inc. (QFIN): Free Stock Analysis Report Climb Global Solutions, Inc. (CLMB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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