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PSN vs. PLTR: Which Stock Is the Better Value Option?

Zacks Equity Research
·2-min read

Investors interested in Technology Services stocks are likely familiar with Parsons (PSN) and Palantir Technologies Inc. (PLTR). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Parsons has a Zacks Rank of #2 (Buy), while Palantir Technologies Inc. has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that PSN likely has seen a stronger improvement to its earnings outlook than PLTR has recently. But this is just one piece of the puzzle for value investors.

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.

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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.

PSN currently has a forward P/E ratio of 23.02, while PLTR has a forward P/E of 260.33. We also note that PSN has a PEG ratio of 1.87. 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. PLTR currently has a PEG ratio of 8.42.

Another notable valuation metric for PSN is its P/B ratio of 2.21. 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, PLTR has a P/B of 6.86.

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

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


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Parsons Corporation (PSN) : Free Stock Analysis Report
 
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
 
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Zacks Investment Research