Investors with an interest in Technology Services stocks have likely encountered both Trane Technologies (TT) and SailPoint Technologies (SAIL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, both Trane Technologies and SailPoint Technologies are holding 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. However, value investors will care about much more than just this.
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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
TT currently has a forward P/E ratio of 29.65, while SAIL has a forward P/E of 582.10. We also note that TT has a PEG ratio of 10.63. 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. SAIL currently has a PEG ratio of 38.81.
Another notable valuation metric for TT is its P/B ratio of 4.51. 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 6.55.
These are just a few of the metrics contributing to TT's Value grade of B and SAIL's Value grade of F.
Both TT and SAIL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TT is the superior value option right now.
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Trane Technologies plc (TT): Free Stock Analysis Report
SailPoint Technologies Holdings, Inc. (SAIL): 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.