Investors looking for stocks in the Technology Services sector might want to consider either Coursera (COUR) or Nomura Research Institute (NRILY). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Coursera has a Zacks Rank of #1 (Strong Buy), while Nomura Research Institute has a Zacks Rank of #4 (Sell). 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 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.
COUR currently has a forward P/E ratio of 8.71, while NRILY has a forward P/E of 22.56. We also note that COUR has a PEG ratio of 0.18. 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. NRILY currently has a PEG ratio of 1.80.
Another notable valuation metric for COUR is its P/B ratio of 0.83. 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, NRILY has a P/B of 6.22.
Based on these metrics and many more, COUR holds a Value grade of A, while NRILY has a Value grade of C.
COUR has seen stronger estimate revision activity and sports more attractive valuation metrics than NRILY, so it seems like value investors will conclude that COUR is the superior option right now.
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Coursera, Inc. (COUR): Free Stock Analysis Report
Nomura Research Institute (NRILY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).