Investors with an interest in Computer - Services stocks have likely encountered both Forrester Research (FORR) and CACI International (CACI). 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Right now, Forrester Research is sporting a Zacks Rank of #2 (Buy), while CACI International 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 FORR is likely seeing its earnings outlook improve to a greater extent. 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.
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.
FORR currently has a forward P/E ratio of 10.02, while CACI has a forward P/E of 23.76. We also note that FORR has a PEG ratio of 0.74. 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. CACI currently has a PEG ratio of 2.35.
Another notable valuation metric for FORR is its P/B ratio of 1.17. 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, CACI has a P/B of 3.36.
These are just a few of the metrics contributing to FORR's Value grade of A and CACI's Value grade of C.
FORR sticks out from CACI in both our Zacks Rank and Style Scores models, so value investors will likely feel that FORR is the better option right now.
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