Smith Company and Atlantic Company operate in the same industry. Smith has a price-earnings (PE) multiple of 15 and Atlantic has a PE of 25. The expected earnings-per-share (EPS) growth rate for each company is 20%. Which statement is correct? 

Atlantic is more profitable than Smith. 

Atlantic is undervalued relative to Smith. 

Smith is undervalued compared to Atlantic. 

Both stocks provide equal value because their growth rate is the same.