Investors interested in stocks from the Technology Services sector have probably already heard of 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, TTEC Holdings has a Zacks Rank of #2 (Buy), while MeridianLink has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TTEC is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
TTEC currently has a forward P/E ratio of 4.39, while MLNK has a forward P/E of 47.24. We also note that TTEC has a PEG ratio of 0.26. 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. MLNK currently has a PEG ratio of 1.59.
Another notable valuation metric for TTEC is its P/B ratio of 0.83. 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, MLNK has a P/B of 2.98.
These metrics, and several others, help TTEC earn a Value grade of B, while MLNK has been given a Value grade of D.
TTEC has seen stronger estimate revision activity and sports more attractive valuation metrics than MLNK, so it seems like value investors will conclude that TTEC is the superior 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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