HSON vs. EXLS: Which Stock Should Value Investors Buy Now?

By Zacks Investment ResearchStock MarketsMar 31, 2020 11:40PM ET

www.investing.com/analysis/hson-vs-exls-which-stock-should-value-investors-buy-now-200520291

HSON vs. EXLS: Which Stock Should Value Investors Buy Now?

By Zacks Investment Research | Mar 31, 2020 11:40PM ET

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Investors looking for stocks in the Outsourcing sector might want to consider either Hudson Global (HSON) or ExlService Holdings (EXLS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Hudson Global and ExlService Holdings are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle 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.

HSON currently has a forward P/E ratio of 15, while EXLS has a forward P/E of 15.04. We also note that HSON has a PEG ratio of 0.43. 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. EXLS currently has a PEG ratio of 1.25.

Another notable valuation metric for HSON is its P/B ratio of 0.74. 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, EXLS has a P/B of 2.65.

These metrics, and several others, help HSON earn a Value grade of B, while EXLS has been given a Value grade of C.

Both HSON and EXLS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HSON is the superior value option right now.

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Hudson Global, Inc. (HSON): Free Stock Analysis Report

ExlService Holdings, Inc. (EXLS): Free Stock Analysis Report

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HSON vs. EXLS: Which Stock Should Value Investors Buy Now?

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