Investors interested in stocks from the Technology Services sector have probably already heard of TTEC Holdings (TTEC) and Ibotta (IBTA). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, TTEC Holdings is sporting a Zacks Rank of #2 (Buy), while Ibotta has a Zacks Rank of #5 (Strong Sell). This means that TTEC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
TTEC currently has a forward P/E ratio of 3.41, while IBTA has a forward P/E of 35.92. We also note that TTEC has a PEG ratio of 0.42. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IBTA currently has a PEG ratio of 3.82.
Another notable valuation metric for TTEC is its P/B ratio of 0.70. 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, IBTA has a P/B of 2.80.
These are just a few of the metrics contributing to TTEC's Value grade of B and IBTA's Value grade of F.
TTEC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TTEC is likely the superior value option right now.
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TeleTech Holdings, Inc. (TTEC) : Free Stock Analysis Report
Ibotta, Inc. (IBTA) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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