Investors interested in Medical Info Systems stocks are likely familiar with Definitive Healthcare Corp. (DH) and Privia Health (PRVA). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Definitive Healthcare Corp. and Privia Health are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that DH likely has seen a stronger improvement to its earnings outlook than PRVA has recently. However, value investors will care about much more than just this.
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.
DH currently has a forward P/E ratio of 13.79, while PRVA has a forward P/E of 148.10. We also note that DH has a PEG ratio of 1.51. 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. PRVA currently has a PEG ratio of 5.63.
Another notable valuation metric for DH is its P/B ratio of 0.79. 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, PRVA has a P/B of 3.91.
Based on these metrics and many more, DH holds a Value grade of A, while PRVA has a Value grade of C.
DH has seen stronger estimate revision activity and sports more attractive valuation metrics than PRVA, so it seems like value investors will conclude that DH is the superior option right now.
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