Investors interested in stocks from the Technology Services sector have probably already heard of Skillsoft Corp. (SKIL) and Climb Global Solutions (CLMB). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Skillsoft Corp. is sporting a Zacks Rank of #1 (Strong Buy), while Climb Global Solutions has a Zacks Rank of #5 (Strong Sell). 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 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.
SKIL currently has a forward P/E ratio of 3.02, while CLMB has a forward P/E of 21.88. We also note that SKIL has a PEG ratio of 0.30. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CLMB currently has a PEG ratio of 1.82.
Another notable valuation metric for SKIL is its P/B ratio of 2.12. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CLMB has a P/B of 4.39.
These metrics, and several others, help SKIL earn a Value grade of A, while CLMB has been given a Value grade of C.
SKIL sticks out from CLMB in both our Zacks Rank and Style Scores models, so value investors will likely feel that SKIL is the better option right now.
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Skillsoft Corp. (SKIL): 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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