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SYNH vs. HQY: Which Stock Is the Better Value Option?

Zacks Equity Research
Updated
CWCO vs. GWRS: Which Stock Is the Better Value Option?

Investors interested in Medical Services stocks are likely familiar with Syneos Health (SYNH) and HealthEquity (HQY). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Syneos Health is sporting a Zacks Rank of #2 (Buy), while HealthEquity has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SYNH 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.

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The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

SYNH currently has a forward P/E ratio of 16.18, while HQY has a forward P/E of 75.80. We also note that SYNH has a PEG ratio of 0.92. 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. HQY currently has a PEG ratio of 2.28.

Another notable valuation metric for SYNH is its P/B ratio of 1.54. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HQY has a P/B of 12.06.

Based on these metrics and many more, SYNH holds a Value grade of B, while HQY has a Value grade of F.

SYNH sticks out from HQY in both our Zacks Rank and Style Scores models, so value investors will likely feel that SYNH is the better option right now.


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INC Research Holdings, Inc. (SYNH) : Free Stock Analysis Report
 
HealthEquity, Inc. (HQY) : Free Stock Analysis Report
 
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