CORE vs. SPSC: Which Stock Is the Better Value Option?
Investors interested in stocks from the Business - Services sector have probably already heard of Core-Mark (CORE) and SPS Commerce (SPSC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Core-Mark is sporting a Zacks Rank of #1 (Strong Buy), while SPS Commerce has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CORE has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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 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.
CORE currently has a forward P/E ratio of 17.92, while SPSC has a forward P/E of 40.61. We also note that CORE has a PEG ratio of 2.24. 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. SPSC currently has a PEG ratio of 2.71.
Another notable valuation metric for CORE is its P/B ratio of 2.28. 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, SPSC has a P/B of 4.86.
Based on these metrics and many more, CORE holds a Value grade of B, while SPSC has a Value grade of D.
CORE stands above SPSC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CORE is the superior value option right now.
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Core-Mark Holding Company, Inc. (CORE): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.