STNE or FFIV: Which Is the Better Value Stock Right Now?

Investors looking for stocks in the Internet - Software sector might want to consider either StoneCo Ltd. (STNE) or F5 Networks (FFIV). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both StoneCo Ltd. and F5 Networks are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.

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.

STNE currently has a forward P/E ratio of 12.04, while FFIV has a forward P/E of 14.22. We also note that STNE has a PEG ratio of 0.56. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FFIV currently has a PEG ratio of 2.01.

Another notable valuation metric for STNE is its P/B ratio of 1.63. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FFIV has a P/B of 3.69.

These metrics, and several others, help STNE earn a Value grade of A, while FFIV has been given a Value grade of C.

Both STNE and FFIV are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that STNE is the superior value option right now.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

StoneCo Ltd. (STNE) : Free Stock Analysis Report

F5, Inc. (FFIV) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.