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

Investors interested in stocks from the Technology Services sector have probably already heard of First Advantage (FA) and Paymentus (PAY). 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on 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. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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 12.17, while PAY has a forward P/E of 163.38. We also note that FA has a PEG ratio of 1.05. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PAY currently has a PEG ratio of 12.74.

Another notable valuation metric for FA is its P/B ratio of 1.73. 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, PAY has a P/B of 4.41.

These metrics, and several others, help FA earn a Value grade of B, while PAY has been given a Value grade of D.

FA sticks out from PAY in both our Zacks Rank and Style Scores models, so value investors will likely feel that FA is the better 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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