Investors with an interest in Technology Services stocks have likely encountered both Qifu Technology, Inc. (QFIN – Free Report) and Climb Global Solutions (CLMB – Free Report) . 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, both Qifu Technology, Inc. and Climb Global Solutions are sporting a Zacks Rank of # 1 (Strong Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle 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.
QFIN currently has a forward P/E ratio of 6.72, while CLMB has a forward P/E of 30.62. We also note that QFIN has a PEG ratio of 0.32. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company’s expected earnings growth rate. CLMB currently has a PEG ratio of 1.91.
Another notable valuation metric for QFIN is its P/B ratio of 1.90. 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, CLMB has a P/B of 6.66.
Based on these metrics and many more, QFIN holds a Value grade of A, while CLMB has a Value grade of C.
Both QFIN and CLMB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that QFIN is the superior value option right now.
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