DXC or EPAM: Which Is the Better Value Stock Right Now?

Zacks
30 Nov 2024

Investors looking for stocks in the Computers - IT Services sector might want to consider either DXC Technology Company. (DXC) or Epam (EPAM). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

DXC Technology Company. and Epam are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.

DXC currently has a forward P/E ratio of 7.04, while EPAM has a forward P/E of 23. We also note that DXC has a PEG ratio of 1.45. 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. EPAM currently has a PEG ratio of 3.02.

Another notable valuation metric for DXC is its P/B ratio of 1.25. 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, EPAM has a P/B of 3.94.

These are just a few of the metrics contributing to DXC's Value grade of A and EPAM's Value grade of C.

Both DXC and EPAM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DXC is the superior value option right now.

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DXC Technology Company. (DXC) : Free Stock Analysis Report

EPAM Systems, Inc. (EPAM) : Free Stock Analysis Report

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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