CRUS vs. LSCC: Which Stock Is the Better Value Option?
Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of Cirrus Logic (CRUS) and Lattice Semiconductor (LSCC). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Cirrus Logic and Lattice Semiconductor are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CRUS has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
CRUS currently has a forward P/E ratio of 17.40, while LSCC has a forward P/E of 24.14. We also note that CRUS has a PEG ratio of 1.16. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LSCC currently has a PEG ratio of 1.93.
Another notable valuation metric for CRUS is its P/B ratio of 2.04. 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, LSCC has a P/B of 5.50.
Based on these metrics and many more, CRUS holds a Value grade of B, while LSCC has a Value grade of D.
CRUS stands above LSCC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CRUS is the superior value option right now.
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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.