IInvestors interested in technology services stocks have likely heard of AstroNova (ALOT) and Thomson Reuters (TRI). But which of these two stocks offers investors the better value opportunity right now? Let’s take a closer look.
There are many strategies for discovering value stocks, but we’ve found that combining a strong Zacks rank with an impressive note in the Value category of our Style Scores system yields the best returns. Zacks Rank is a proven strategy that targets companies with positive revision trends in earnings estimates, while our Style Scores aim to rank companies based on specific characteristics.
Currently, AstroNova has a Zacks rank of #2 (Buy), while Thomson Reuters has a Zacks rank of #3 (Hold). This means that activity revising ALOT’s earnings estimates has been more impressive, so investors should be comfortable with the improving analyst outlook. But that’s only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional numbers and metrics to determine if a company is undervalued at its current share price level.
The Style Score Value assessment considers a variety of fundamental metrics, including popular price-to-earnings ratio, price-to-earnings ratio, earnings yield, cash flow per share, and a number of other key stats commonly used by value investors .
ALOT currently has a forward P/E of 37, while TRI has a forward P/E of 50.98. We also note that ALOT has a PEG ratio of 3.08. This number is similar to the commonly used P/E ratio, with the PEG ratio also accounting for a company’s expected earnings growth rate. TRI currently has a PEG ratio of 4.23.
Another notable valuation metric for ALOT is its P/B ratio of 1.41. Investors use the P/B ratio to see a stock’s market value compared to its book value, which is defined as total assets less total liabilities. For comparison, TRI has a P/B of 3.29.
Based on these and many more metrics, ALOT has a score of B, while TRI has a score of C.
ALOT stands above TRI thanks to its solid earnings prospects, and based on these valuation numbers, we also think ALOT is the best value option right now.
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AstroNova, Inc. (ALOT): Free Stock Research Report
Thomson Reuters Corp (TRI): Free stock research 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.