Investors with an interest in Security and Safety Services stocks have likely encountered both Resideo Technologies (REZI) and Axon Enterprise (AAXN). 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, Resideo Technologies is sporting a Zacks Rank of #2 (Buy), while Axon Enterprise 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 REZI has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
REZI currently has a forward P/E ratio of 8.34, while AAXN has a forward P/E of 60.56. We also note that REZI has a PEG ratio of 3.30. 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. AAXN currently has a PEG ratio of 4.04.
Another notable valuation metric for REZI is its P/B ratio of 0.79. 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, AAXN has a P/B of 9.
Based on these metrics and many more, REZI holds a Value grade of A, while AAXN has a Value grade of F.
REZI has seen stronger estimate revision activity and sports more attractive valuation metrics than AAXN, so it seems like value investors will conclude that REZI is the superior option right now.
Resideo Technologies, Inc. (REZI): Free Stock Analysis Report
Axon Enterprise, Inc (AAXN): Free Stock Analysis Report
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