Investors looking for stocks in the Computers - IT Services sector might want to consider either Computer Task Group (CTG) or CoStar Group (CSGP). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Computer Task Group and CoStar Group are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that CTG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
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.
CTG currently has a forward P/E ratio of 18.55, while CSGP has a forward P/E of 78.46. We also note that CTG has a PEG ratio of 0.93. 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. CSGP currently has a PEG ratio of 3.92.
Another notable valuation metric for CTG is its P/B ratio of 1.95. 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, CSGP has a P/B of 6.31.
These metrics, and several others, help CTG earn a Value grade of A, while CSGP has been given a Value grade of D.
CTG stands above CSGP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CTG is the superior value option right now.
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Computer Task Group, Incorporated (CTG) : Free Stock Analysis Report
CoStar Group, Inc. (CSGP) : Free Stock Analysis Report
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