Which stock is currently the cheapest?

Investors interested in stocks in the technology services sector have probably heard of Parsons (PSN) and AppLovin (APP). But which of these two stocks is more attractive to value investors? To find out, we have to take a closer look.

The best way to find quality stocks is to combine a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank highlights companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Parsons and AppLovin both currently have a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently had positive earnings estimate revisions. Investors should therefore be confident that both companies' earnings prospects are improving. However, this is only part of the picture for value investors.

Value investors also attempt to analyze a variety of traditional numbers and metrics to determine whether a company is undervalued at current share price levels.

The Style Score Value rating takes into account a variety of important fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key statistics commonly used by value investors.

PSN currently has a Forward P/E of 34.23, while APP has a Forward P/E of 45.79. We also note that PSN has a PEG ratio of 2.13. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. APP currently has a PEG ratio of 2.29.

Another notable valuation metric for PSN is its P/E ratio of 4.82. Investors use the P/E ratio to compare a stock's market value compared to its book value, which is defined as total assets minus total liabilities. In comparison, APP has a P/E ratio of 65.25.

Based on these and many other metrics, PSN has a B rating, while APP has a D rating.

Both PSN and APP are impressive stocks with solid earnings prospects, but based on these valuation numbers, we believe PSN is the more valuable option right now.

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Parsons Corporation (PSN): Free stock analysis report

AppLovin Corporation (APP): Free stock analysis report

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