Investors with an interest in Computer – Services stocks have likely encountered both CACI International (CACI) and Perficient (PRFT). But which of these two stocks presents investors with the better value opportunity right now? Let’s take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
CACI International and Perficient are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.
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.
CACI currently has a forward P/E ratio of 14.14, while PRFT has a forward P/E of 21.97. We also note that CACI has a PEG ratio of 1.08. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company’s expected EPS growth rate. PRFT currently has a PEG ratio of 1.57.
Another notable valuation metric for CACI is its P/B ratio of 2.37. 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, PRFT has a P/B of 5.68.
These metrics, and several others, help CACI earn a Value grade of A, while PRFT has been given a Value grade of D.
Both CACI and PRFT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CACI is the superior value option right now.
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