Investors looking for stocks in the Technology Services sector might want to consider either Coursera (COUR) or Amplitude, Inc. (AMPL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Coursera has a Zacks Rank of #2 (Buy), while Amplitude, Inc. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that COUR has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
COUR currently has a forward P/E ratio of 9.60, while AMPL has a forward P/E of 205.54. We also note that COUR has a PEG ratio of 0.23. 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 4.95.
Another notable valuation metric for COUR is its P/B ratio of 1.53. 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 4.63.
These metrics, and several others, help COUR earn a Value grade of B, while AMPL has been given a Value grade of D.
COUR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that COUR is likely the superior value option right now.
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Coursera, Inc. (COUR): Free Stock Analysis Report
Amplitude, Inc. (AMPL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).