EGHT vs. SMAR: Which Stock Is the Better Value Option?
Investors with an interest in Internet - Software stocks have likely encountered both 8x8 (EGHT) and Smartsheet (SMAR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both 8x8 and Smartsheet are holding a Zacks Rank of # 1 (Strong 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. However, value investors will care about much more than just this.
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 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.
EGHT currently has a forward P/E ratio of 7.84, while SMAR has a forward P/E of 39.29. We also note that EGHT has a PEG ratio of 0.67. 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. SMAR currently has a PEG ratio of 1.25.
Another notable valuation metric for EGHT is its P/B ratio of 3.07. 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, SMAR has a P/B of 11.06.
Based on these metrics and many more, EGHT holds a Value grade of B, while SMAR has a Value grade of F.
Both EGHT and SMAR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EGHT is the superior value option right now.
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Smartsheet (SMAR) : Free Stock Analysis Report
