INGM or AMPL: Which Is the Better Value Stock Right Now?

Investors looking for stocks in the Technology Services sector might want to consider either Ingram Micro (INGM) or Amplitude, Inc. (AMPL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 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.

Ingram Micro and Amplitude, Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that INGM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

INGM currently has a forward P/E ratio of 7.96, while AMPL has a forward P/E of 211.35. We also note that INGM has a PEG ratio of 0.70. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AMPL currently has a PEG ratio of 4.51.

Another notable valuation metric for INGM is its P/B ratio of 1.46. 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, AMPL has a P/B of 11.97.

Based on these metrics and many more, INGM holds a Value grade of A, while AMPL has a Value grade of F.

INGM has seen stronger estimate revision activity and sports more attractive valuation metrics than AMPL, so it seems like value investors will conclude that INGM is the superior option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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