Here is Why Growth Investors Should Buy Climb Global (CLMB) Now

Investors looking for stocks in the Technology Services sector might want to consider either Climb Global Solutions (CLMB) or QXO, Inc. (QXO). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Climb Global Solutions and QXO, Inc. 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 CLMB is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

CLMB currently has a forward P/E ratio of 29.36, while QXO has a forward P/E of 47.69. We also note that CLMB has a PEG ratio of 1.84. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. QXO currently has a PEG ratio of 2.38.

Another notable valuation metric for CLMB is its P/B ratio of 6.39. 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, QXO has a P/B of 13.22.

These are just a few of the metrics contributing to CLMB's Value grade of B and QXO's Value grade of D.

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

Zacks Investment Research

Investors interested in Business Services stocks should always be looking to find the best-performing companies in the group. Climb Global Solutions (CLMB) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Business Services peers, we might be able to answer that question.

Climb Global Solutions is one of 307 individual stocks in the Business Services sector. Collectively, these companies sit at #5 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Climb Global Solutions is currently sporting a Zacks Rank of #1 (Strong Buy).

Over the past 90 days, the Zacks Consensus Estimate for CLMB's full-year earnings has moved 26.2% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.

Our latest available data shows that CLMB has returned about 121.7% since the start of the calendar year. In comparison, Business Services companies have returned an average of 27.2%. This means that Climb Global Solutions is performing better than its sector in terms of year-to-date returns.

Another Business Services stock, which has outperformed the sector so far this year, is Pentair plc (PNR). The stock has returned 46.2% year-to-date.

The consensus estimate for Pentair plc's current year EPS has increased 0.6% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Looking more specifically, Climb Global Solutions belongs to the Technology Services industry, which includes 164 individual stocks and currently sits at #64 in the Zacks Industry Rank. Stocks in this group have gained about 55.1% so far this year, so CLMB is performing better this group in terms of year-to-date returns.

Pentair plc, however, belongs to the Waste Removal Services industry. Currently, this 17-stock industry is ranked #204. The industry has moved +23.7% so far this year.

Going forward, investors interested in Business Services stocks should continue to pay close attention to Climb Global Solutions and Pentair plc as they could maintain their solid performance.

Zacks Investment Research

While "the trend is your friend" when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of success by making sure the sustainability of a trend isn't easy.

Often, the direction of a stock's price movement reverses quickly after taking a position in it, making investors incur a short-term capital loss. So, it's important to ensure that there are enough factors -- such as sound fundamentals, positive earnings estimate revisions, etc. -- that could keep the momentum in the stock going.

Our "Recent Price Strength" screen, which is created on a unique short-term trading strategy, could be pretty useful in this regard. This predefined screen makes it really easy to shortlist the stocks that have enough fundamental strength to maintain their recent uptrend. Also, the screen passes only the stocks that are trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.

There are several stocks that passed through the screen and

Climb Global Solutions

(CLMB) is one of them. Here are the key reasons why this stock is a solid choice for "trend" investing.

A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. CLMB is quite a good fit in this regard, gaining 37.2% over this period.

However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 13% over the past four weeks ensures that the trend is still in place for the stock of this computer software reseller.

Moreover, CLMB is currently trading at 96.7% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout.

Looking at the fundamentals, the stock currently carries a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here

Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance.

So, the price trend in CLMB may not reverse anytime soon.

In addition to CLMB, there are several other stocks that currently pass through our "Recent Price Strength" screen. You may consider investing in them and start looking for the newest stocks that fit these criteria.

This is not the only screen that could help you find your next winning stock pick. Based on your personal investing style, you may choose from over 45 Zacks Premium Screens that are strategically created to beat the market.

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Zacks Investment Research