Investors seeking value opportunities in the Technology Services sector might be drawn to both Qifu Technology, Inc. (QFIN) and Ibotta (IBTA). But which stock offers the most compelling value proposition? To determine the winner, we’ll delve deeper into their fundamentals using a combination of Zacks Rank and Value Style Scores.
The Zacks Rank is a proven system that identifies companies with positive earnings estimate revision trends, while our Style Scores grade companies based on specific characteristics. Currently, QFIN boasts a Zacks Rank of #1 (Strong Buy), signifying impressive earnings estimate revisions, while IBTA holds a Zacks Rank of #3 (Hold). This indicates that QFIN’s analyst outlook is more favorable, giving investors confidence in its future prospects.
However, this is just one piece of the puzzle for value investors. They often rely on traditional, proven metrics to identify undervalued stocks. Our Value category grades stocks based on essential metrics like the P/E ratio, P/S ratio, earnings yield, cash flow per share, and other fundamental factors that value investors commonly utilize.
QFIN currently exhibits a forward P/E ratio of 6.40, significantly lower than IBTA’s forward P/E of 311.16. Moreover, QFIN boasts a PEG ratio of 0.44, a metric that incorporates expected earnings growth into the P/E ratio. In contrast, IBTA’s PEG ratio stands at 8.18.
Another notable valuation metric for QFIN is its P/B ratio of 1.68. This ratio compares a stock’s market value to its book value, which is calculated as total assets minus total liabilities. In comparison, IBTA’s P/B ratio is 5.08. These metrics, along with several others, contribute to QFIN receiving a Value grade of A, while IBTA earns a Value grade of D.
In conclusion, QFIN demonstrates stronger estimate revision activity and exhibits more appealing valuation metrics than IBTA. Therefore, value investors are likely to conclude that QFIN presents the superior investment opportunity at this time.
