Investors looking for stocks in the Technology Services sector might want to consider either Skillsoft Corp. (SKIL) or AppLovin (APP). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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.
Skillsoft Corp. has a Zacks Rank of #1 (Strong Buy), while AppLovin has a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that SKIL likely has seen a stronger improvement to its earnings outlook than APP has recently. But this is just one piece of the puzzle 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
SKIL currently has a forward P/E ratio of 2.13, while APP has a forward P/E of 40.72. We also note that SKIL has a PEG ratio of 0.21. 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. APP currently has a PEG ratio of 2.04.
Another notable valuation metric for SKIL is its P/B ratio of 19.44. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, APP has a P/B of 141.61.
Based on these metrics and many more, SKIL holds a Value grade of A, while APP has a Value grade of D.
SKIL stands above APP 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 AppLovin Corporation (APP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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