Investors interested in stocks from the Technology Services sector have probably already heard of Qifu Technology, Inc. (QFIN) and Amplitude, Inc. (AMPL). 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.
Qifu Technology, Inc. and Amplitude, Inc. are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that QFIN has an improving earnings 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.
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.
QFIN currently has a forward P/E ratio of 6.09, while AMPL has a forward P/E of 196.88. We also note that QFIN has a PEG ratio of 0.42. 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. AMPL currently has a PEG ratio of 4.74.
Another notable valuation metric for QFIN is its P/B ratio of 1.59. 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, AMPL has a P/B of 4.47.
Based on these metrics and many more, QFIN holds a Value grade of A, while AMPL has a Value grade of F.
QFIN stands above AMPL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that QFIN is the superior value option right now.
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