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GFS vs. AMBA: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Electronics - Semiconductors stocks have likely encountered both GlobalFoundries Inc. (GFS - Free Report) and Ambarella (AMBA - Free Report) . 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.
GlobalFoundries Inc. and Ambarella are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GFS has an improving earnings outlook. But this is only part of the picture 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.
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.
GFS currently has a forward P/E ratio of 21.85, while AMBA has a forward P/E of 51.35. We also note that GFS has a PEG ratio of 0.45. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AMBA currently has a PEG ratio of 5.76.
Another notable valuation metric for GFS is its P/B ratio of 3.59. 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, AMBA has a P/B of 3.65.
Based on these metrics and many more, GFS holds a Value grade of B, while AMBA has a Value grade of F.
GFS 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 GFS is likely the superior value option right now.
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GFS vs. AMBA: Which Stock Should Value Investors Buy Now?
Investors with an interest in Electronics - Semiconductors stocks have likely encountered both GlobalFoundries Inc. (GFS - Free Report) and Ambarella (AMBA - Free Report) . 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.
GlobalFoundries Inc. and Ambarella are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GFS has an improving earnings outlook. But this is only part of the picture 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.
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.
GFS currently has a forward P/E ratio of 21.85, while AMBA has a forward P/E of 51.35. We also note that GFS has a PEG ratio of 0.45. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AMBA currently has a PEG ratio of 5.76.
Another notable valuation metric for GFS is its P/B ratio of 3.59. 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, AMBA has a P/B of 3.65.
Based on these metrics and many more, GFS holds a Value grade of B, while AMBA has a Value grade of F.
GFS 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 GFS is likely the superior value option right now.