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G or EXLS: Which Is the Better Value Stock Right Now?

Investors interested in Outsourcing stocks are likely familiar with Genpact (G) and ExlService Holdings (EXLS). 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.

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.

Currently, both Genpact and ExlService Holdings are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

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 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.

G currently has a forward P/E ratio of 17.14, while EXLS has a forward P/E of 30.57. We also note that G has a PEG ratio of 1.43. 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. EXLS currently has a PEG ratio of 2.35.

Another notable valuation metric for G is its P/B ratio of 4.93. 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, EXLS has a P/B of 8.36.

These are just a few of the metrics contributing to G's Value grade of B and EXLS's Value grade of C.

Both G and EXLS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that G is the superior value option right now.


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Genpact Limited (G): Free Stock Analysis Report
 
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