Yahoo Finance IFNNY vs. AMBA: Which Stock Is the Better Value Option?
Investors interested in Electronics - Semiconductors stocks are likely familiar with Infineon Technologies AG (IFNNY) and Ambarella (AMBA). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Infineon Technologies AG and Ambarella are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that IFNNY is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.
IFNNY currently has a forward P/E ratio of 14.27, while AMBA has a forward P/E of 169.32. We also note that IFNNY has a PEG ratio of 1.29. 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. AMBA currently has a PEG ratio of 19.
Another notable valuation metric for IFNNY is its P/B ratio of 3.07. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, AMBA has a P/B of 6.16.
These metrics, and several others, help IFNNY earn a Value grade of B, while AMBA has been given a Value grade of D.
IFNNY 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 IFNNY is likely the superior value option right now.
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Infineon Technologies AG (IFNNY) : Free Stock Analysis Report
Ambarella, Inc. (AMBA) : Free Stock Analysis Report
