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CXM vs. TT: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Technology Services sector have probably already heard of Sprinklr (CXM - Free Report) and Trane Technologies (TT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Sprinklr and Trane Technologies are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CXM currently has a forward P/E ratio of 22.80, while TT has a forward P/E of 32.76. We also note that CXM has a PEG ratio of 0.76. 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. TT currently has a PEG ratio of 2.66.

Another notable valuation metric for CXM is its P/B ratio of 4.07. 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, TT has a P/B of 11.26.

These are just a few of the metrics contributing to CXM's Value grade of B and TT's Value grade of C.

Both CXM and TT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CXM is the superior value option right now.


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