Investors with an interest in Technology Services stocks have likely encountered both Jacobs Solutions (J) and Symbotic Inc. (SYM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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, Jacobs Solutions is sporting a Zacks Rank of #2 (Buy), while Symbotic Inc. has a Zacks Rank of #5 (Strong Sell). This means that J'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.
J currently has a forward P/E ratio of 24.17, while SYM has a forward P/E of 197.63. We also note that J has a PEG ratio of 1.99. 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. SYM currently has a PEG ratio of 6.59.
Another notable valuation metric for J is its P/B ratio of 4.56. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SYM has a P/B of 63.09.
Based on these metrics and many more, J holds a Value grade of B, while SYM has a Value grade of F.
J has seen stronger estimate revision activity and sports more attractive valuation metrics than SYM, so it seems like value investors will conclude that J is the superior option right now.
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Symbotic Inc. (SYM) : 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.
