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COHR or SYM: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Technology Services sector have probably already heard of Coherent (COHR - Free Report) and Symbotic Inc. (SYM - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Coherent is sporting a Zacks Rank of #2 (Buy), while Symbotic 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 COHR 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.
COHR currently has a forward P/E ratio of 23.75, while SYM has a forward P/E of 99.88. We also note that COHR has a PEG ratio of 0.51. 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. SYM currently has a PEG ratio of 3.33.
Another notable valuation metric for COHR is its P/B ratio of 2.31. 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, SYM has a P/B of 36.49.
Based on these metrics and many more, COHR holds a Value grade of B, while SYM has a Value grade of D.
COHR stands above SYM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that COHR is the superior value option right now.