Investors interested in stocks from the Business - Services sector have probably already heard of Concentrix Corporation (CNXC) and Bowman Consulting (BWMN). 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.
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 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, Concentrix Corporation has a Zacks Rank of #2 (Buy), while Bowman Consulting has a Zacks Rank of #4 (Sell). This means that CNXC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
CNXC currently has a forward P/E ratio of 3.40, while BWMN has a forward P/E of 22.17. We also note that CNXC has a PEG ratio of 0.39. 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. BWMN currently has a PEG ratio of 1.15.
Another notable valuation metric for CNXC is its P/B ratio of 0.91. 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, BWMN has a P/B of 2.33.
Based on these metrics and many more, CNXC holds a Value grade of A, while BWMN has a Value grade of C.
CNXC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CNXC is likely the superior value option right now.
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Concentrix Corporation (CNXC): Free Stock Analysis Report Bowman Consulting Group Ltd. (BWMN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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