FA or PAY: Which Is the Better Value Stock Right Now?

Investors looking for stocks in the Technology Services sector might want to consider either First Advantage (FA) or Paymentus (PAY). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, First Advantage has a Zacks Rank of #2 (Buy), while Paymentus has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that FA likely has seen a stronger improvement to its earnings outlook than PAY 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.

FA currently has a forward P/E ratio of 16.28, while PAY has a forward P/E of 835. We also note that FA has a PEG ratio of 1.52. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PAY currently has a PEG ratio of 65.13.

Another notable valuation metric for FA is its P/B ratio of 2.32. 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, PAY has a P/B of 5.22.

Based on these metrics and many more, FA holds a Value grade of B, while PAY has a Value grade of D.

FA is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FA is likely the superior value option right now.

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First Advantage Corporation (FA) : Free Stock Analysis Report
 
Paymentus Holdings, Inc. (PAY) : Free Stock Analysis Report
 
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