GHLD or SOFI: Which Is the Better Value Stock Right Now?

Zacks
11 Apr

Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Guild Holdings Company (GHLD) or SoFi Technologies, Inc. (SOFI). 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Guild Holdings Company has a Zacks Rank of #2 (Buy), while SoFi Technologies, Inc. has a Zacks Rank of #3 (Hold). This means that GHLD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

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.

GHLD currently has a forward P/E ratio of 8.19, while SOFI has a forward P/E of 41.84. We also note that GHLD has a PEG ratio of 0.77. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SOFI currently has a PEG ratio of 1.56.

Another notable valuation metric for GHLD is its P/B ratio of 0.65. 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, SOFI has a P/B of 1.77.

These are just a few of the metrics contributing to GHLD's Value grade of B and SOFI's Value grade of F.

GHLD has seen stronger estimate revision activity and sports more attractive valuation metrics than SOFI, so it seems like value investors will conclude that GHLD is the superior option right now.

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Guild Holdings Company (GHLD) : Free Stock Analysis Report

SoFi Technologies, Inc. (SOFI) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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