Investors interested in stocks from the Technology Services sector have probably already heard of TTEC Holdings (TTEC) and Pure Storage (PSTG). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
TTEC Holdings has a Zacks Rank of #1 (Strong Buy), while Pure Storage has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TTEC has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
TTEC currently has a forward P/E ratio of 2.08, while PSTG has a forward P/E of 27.03. We also note that TTEC has a PEG ratio of 0.17. 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. PSTG currently has a PEG ratio of 1.45.
Another notable valuation metric for TTEC is its P/B ratio of 1.07. 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, PSTG has a P/B of 14.36.
Based on these metrics and many more, TTEC holds a Value grade of A, while PSTG has a Value grade of F.
TTEC 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 TTEC is likely the superior value option right now.
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TeleTech Holdings, Inc. (TTEC): Free Stock Analysis Report Pure Storage, Inc. (PSTG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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