Investors with an interest in Technology Services stocks have likely encountered both IQVIA Holdings (IQV) and SailPoint Technologies (SAIL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
IQVIA Holdings has a Zacks Rank of #2 (Buy), while SailPoint Technologies has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that IQV is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
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.
IQV currently has a forward P/E ratio of 22.50, while SAIL has a forward P/E of 178.68. We also note that IQV has a PEG ratio of 1.43. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SAIL currently has a PEG ratio of 11.91.
Another notable valuation metric for IQV is its P/B ratio of 4.35. 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, SAIL has a P/B of 5.24.
These metrics, and several others, help IQV earn a Value grade of B, while SAIL has been given a Value grade of F.
IQV stands above SAIL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that IQV is the superior value option right now.
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