Investors interested in Technology Services stocks are likely familiar with Coursera (COUR) and Amplitude, Inc. (AMPL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Currently, Coursera has a Zacks Rank of #2 (Buy), while Amplitude, Inc. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that COUR is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
COUR currently has a forward P/E ratio of 10.53, while AMPL has a forward P/E of 158.79. We also note that COUR has a PEG ratio of 0.70. 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. AMPL currently has a PEG ratio of 3.83.
Another notable valuation metric for COUR is its P/B ratio of 1.54. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, AMPL has a P/B of 3.54.
These metrics, and several others, help COUR earn a Value grade of B, while AMPL has been given a Value grade of D.
COUR stands above AMPL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that COUR is the superior value option right now.
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Coursera, Inc. (COUR): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).