KN vs. VCRA: Which Stock Is the Better Value Option? : Business Big News
Investors interested in stocks from the Communication — Components sector have probably already heard of Knowles (KN) and Vocera Communications (VCRA). But which of these two companies is the best option for those looking for undervalued stocks? Let’s 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Knowles has a Zacks Rank of #2 (Buy), while Vocera Communications 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 KN has an improving earnings outlook. But this is only part of the picture 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
KN currently has a forward P/E ratio of 14.36, while VCRA has a forward P/E of 85.78. We also note that KN has a PEG ratio of 1.44. 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. VCRA currently has a PEG ratio of 5.92.
Another notable valuation metric for KN is its P/B ratio of 1.39. 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, VCRA has a P/B of 11.87.
These metrics, and several others, help KN earn a Value grade of B, while VCRA has been given a Value grade of D.
KN has seen stronger estimate revision activity and sports more attractive valuation metrics than VCRA, so it seems like value investors will conclude that KN is the superior option right now.
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Knowles Corporation (KN): Free Stock Analysis Report
Vocera Communications, Inc. (VCRA): Free Stock Analysis Report
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