PERI or BCOV: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Internet - Content sector have probably already heard of Perion Network (PERI) and Brightcove (BCOV). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Perion Network is sporting a Zacks Rank of #2 (Buy), while Brightcove has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PERI is likely seeing its earnings outlook improve to a greater extent. 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 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.
PERI currently has a forward P/E ratio of 58.29, while BCOV has a forward P/E of 582. We also note that PERI has a PEG ratio of 9.71. 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. BCOV currently has a PEG ratio of 38.80.
Another notable valuation metric for PERI is its P/B ratio of 0.97. 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, BCOV has a P/B of 6.62.
These metrics, and several others, help PERI earn a Value grade of A, while BCOV has been given a Value grade of D.
PERI sticks out from BCOV in both our Zacks Rank and Style Scores models, so value investors will likely feel that PERI is the better option right now.
Click to get this free report
Perion Network Ltd (PERI): Free Stock Analysis Report
Brightcove Inc. (BCOV): Free Stock Analysis Report
To read this article on Zacks.com click here.