Investors with an interest in Technology Services stocks have likely encountered both AstroNova (ALOT) and DocuSign (DOCU). 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 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.
AstroNova has a Zacks Rank of #2 (Buy), while DocuSign has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ALOT 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
ALOT currently has a forward P/E ratio of 57.38, while DOCU has a forward P/E of 413.06. We also note that ALOT has a PEG ratio of 4.78. 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. DOCU currently has a PEG ratio of 9.13.
Another notable valuation metric for ALOT is its P/B ratio of 0.74. 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, DOCU has a P/B of 77.97.
Based on these metrics and many more, ALOT holds a Value grade of B, while DOCU has a Value grade of F.
ALOT 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 ALOT is likely the superior value option right now.
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AstroNova, Inc. (ALOT) : Free Stock Analysis Report
DocuSign Inc. (DOCU) : Free Stock Analysis Report
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