Investors with an interest in Technology Services stocks have likely encountered both TTEC Holdings (TTEC) and Ibotta (IBTA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
TTEC Holdings and Ibotta are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. This means that TTEC'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 are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
TTEC currently has a forward P/E ratio of 3.13, while IBTA has a forward P/E of 29.29. We also note that TTEC has a PEG ratio of 0.38. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IBTA currently has a PEG ratio of 3.11.
Another notable valuation metric for TTEC is its P/B ratio of 0.61. 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, IBTA has a P/B of 2.10.
Based on these metrics and many more, TTEC holds a Value grade of A, while IBTA has a Value grade of D.
TTEC has seen stronger estimate revision activity and sports more attractive valuation metrics than IBTA, so it seems like value investors will conclude that TTEC is the superior option right now.
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TeleTech Holdings, Inc. (TTEC) : Free Stock Analysis Report
Ibotta, Inc. (IBTA) : 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.
