Investors with an interest in Technology Services stocks have likely encountered both TTEC Holdings (TTEC) and MeridianLink (MLNK). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
TTEC Holdings has a Zacks Rank of #2 (Buy), while MeridianLink has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that TTEC likely has seen a stronger improvement to its earnings outlook than MLNK has recently. However, value investors will care about much more than just this.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
TTEC currently has a forward P/E ratio of 3.70, while MLNK has a forward P/E of 46.19. We also note that TTEC has a PEG ratio of 0.31. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MLNK currently has a PEG ratio of 1.56.
Another notable valuation metric for TTEC is its P/B ratio of 0.71. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MLNK has a P/B of 2.94.
These are just a few of the metrics contributing to TTEC's Value grade of B and MLNK's Value grade of D.
TTEC stands above MLNK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TTEC is the superior value option right now.
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TeleTech Holdings, Inc. (TTEC): Free Stock Analysis Report MeridianLink, Inc. (MLNK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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