Investors interested in Internet - Software stocks are likely familiar with CCC Intelligent Solutions Holdings Inc. (CCC) and Adyen N.V. Unsponsored ADR (ADYEY). 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, CCC Intelligent Solutions Holdings Inc. has a Zacks Rank of #2 (Buy), while Adyen N.V. Unsponsored ADR has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CCC has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
CCC currently has a forward P/E ratio of 12.23, while ADYEY has a forward P/E of 23.79. We also note that CCC has a PEG ratio of 0.91. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ADYEY currently has a PEG ratio of 1.40.
Another notable valuation metric for CCC is its P/B ratio of 1.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ADYEY has a P/B of 6.47.
Based on these metrics and many more, CCC holds a Value grade of B, while ADYEY has a Value grade of F.
CCC stands above ADYEY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CCC is the superior value option right now.
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Today, See These 5 Potential Home Runs >>CCC Intelligent Solutions Holdings Inc. (CCC) : Free Stock Analysis Report
Adyen N.V. Unsponsored ADR (ADYEY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
