Investors interested in stocks from the Medical Info Systems sector have probably already heard of Nextgen Healthcare and HMS Holdings . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Nextgen Healthcare is sporting a Zacks Rank of #2 (Buy), while HMS Holdings has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NXGN has an improving earnings outlook. However, value investors will care about much more than just this.
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 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.
NXGN currently has a forward P/E ratio of 18.59, while HMSY has a forward P/E of 27.68. We also note that NXGN has a PEG ratio of 2.32. 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. HMSY currently has a PEG ratio of 2.77.
Another notable valuation metric for NXGN is its P/B ratio of 2.36. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HMSY has a P/B of 3.28.
These metrics, and several others, help NXGN earn a Value grade of B, while HMSY has been given a Value grade of C.
NXGN has seen stronger estimate revision activity and sports more attractive valuation metrics than HMSY, so it seems like value investors will conclude that NXGN is the superior option right now.
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NXGN or HMSY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Medical Info Systems sector have probably already heard of Nextgen Healthcare and HMS Holdings . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Nextgen Healthcare is sporting a Zacks Rank of #2 (Buy), while HMS Holdings has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NXGN has an improving earnings outlook. However, value investors will care about much more than just this.
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 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.
NXGN currently has a forward P/E ratio of 18.59, while HMSY has a forward P/E of 27.68. We also note that NXGN has a PEG ratio of 2.32. 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. HMSY currently has a PEG ratio of 2.77.
Another notable valuation metric for NXGN is its P/B ratio of 2.36. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HMSY has a P/B of 3.28.
These metrics, and several others, help NXGN earn a Value grade of B, while HMSY has been given a Value grade of C.
NXGN has seen stronger estimate revision activity and sports more attractive valuation metrics than HMSY, so it seems like value investors will conclude that NXGN is the superior option right now.