Investors with an interest in Technology Services stocks have likely encountered both Acuity (AYI) and Amplitude, Inc. (AMPL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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, both Acuity and Amplitude, Inc. are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.
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.
AYI currently has a forward P/E ratio of 15.51, while AMPL has a forward P/E of 178.74. We also note that AYI has a PEG ratio of 1.55. 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. AMPL currently has a PEG ratio of 4.31.
Another notable valuation metric for AYI is its P/B ratio of 3.25. 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, AMPL has a P/B of 4.37.
These are just a few of the metrics contributing to AYI's Value grade of B and AMPL's Value grade of F.
Both AYI and AMPL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AYI is the superior value option right now.
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Amplitude, Inc. (AMPL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
