Investors interested in Technology Services stocks are likely familiar with Skillsoft Corp. (SKIL) and Symbotic Inc. (SYM). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Skillsoft Corp. has a Zacks Rank of #1 (Strong Buy), while Symbotic Inc. has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SKIL 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.
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 2.28, while SYM has a forward P/E of 154.24. We also note that SKIL has a PEG ratio of 0.23. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SYM currently has a PEG ratio of 5.14.
Another notable valuation metric for SKIL is its P/B ratio of 20.73. 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, SYM has a P/B of 75.91.
These metrics, and several others, help SKIL earn a Value grade of A, while SYM has been given a Value grade of F.
SKIL stands above SYM 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 Symbotic Inc. (SYM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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