Investors interested in Medical Services stocks are likely familiar with AMN Healthcare Services (NYSE:AMN) and HealthEquity (HQY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, AMN Healthcare Services (NASDAQ:HCSG) has a Zacks Rank of #2 (Buy), while HealthEquity has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AMN likely has seen a stronger improvement to its earnings outlook than HQY has recently. However, value investors will care about much more than just this.
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.
AMN currently has a forward P/E ratio of 21.94, while HQY has a forward P/E of 48.26. We also note that AMN has a PEG ratio of 3.82. 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. HQY currently has a PEG ratio of 4.01.
Another notable valuation metric for AMN is its P/B ratio of 4.20. 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, HQY has a P/B of 4.32.
These metrics, and several others, help AMN earn a Value grade of B, while HQY has been given a Value grade of D.
AMN stands above HQY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AMN is the superior value option right now.
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AMN Healthcare Services Inc (AMN): Free Stock Analysis Report
HealthEquity, Inc. (HQY): Free Stock Analysis Report
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