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TWKS or SOFI: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Technology Services sector have probably already heard of Thoughtworks Holding, Inc. (TWKS - Free Report) and SoFi Technologies, Inc. (SOFI - Free Report) . 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.

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.

Right now, Thoughtworks Holding, Inc. is sporting a Zacks Rank of #2 (Buy), while SoFi Technologies, Inc. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TWKS has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

TWKS currently has a forward P/E ratio of 50.37, while SOFI has a forward P/E of 80.57. We also note that TWKS has a PEG ratio of 1.52. 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. SOFI currently has a PEG ratio of 1.58.

Another notable valuation metric for TWKS is its P/B ratio of 1.17. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SOFI has a P/B of 1.23.

Based on these metrics and many more, TWKS holds a Value grade of B, while SOFI has a Value grade of D.

TWKS stands above SOFI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TWKS is the superior value option right now.


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