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.
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.
Right now, TTEC Holdings is sporting a Zacks Rank of #2 (Buy), while MeridianLink has a Zacks Rank of #3 (Hold). 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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 4.63, while MLNK has a forward P/E of 48.45. We also note that TTEC has a PEG ratio of 0.27. 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 1.63.
Another notable valuation metric for TTEC is its P/B ratio of 0.88. 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 3.06.
These are just a few of the metrics contributing to TTEC's Value grade of B and MLNK's 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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