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SYMC vs. PEGA: Which Stock Is the Better Value Option?

Investors interested in stocks from the Computer - Software sector have probably already heard of Symantec (SYMC) and Pegasystems (PEGA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Symantec has a Zacks Rank of #1 (Strong Buy), while Pegasystems has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that SYMC likely has seen a stronger improvement to its earnings outlook than PEGA has recently. However, value investors will care about much more than just this.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

SYMC currently has a forward P/E ratio of 12.04, while PEGA has a forward P/E of 81.03. We also note that SYMC has a PEG ratio of 1.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PEGA currently has a PEG ratio of 10.13.

Another notable valuation metric for SYMC is its P/B ratio of 1.99. 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, PEGA has a P/B of 5.95.

These metrics, and several others, help SYMC earn a Value grade of B, while PEGA has been given a Value grade of F.

SYMC has seen stronger estimate revision activity and sports more attractive valuation metrics than PEGA, so it seems like value investors will conclude that SYMC is the superior option right now.

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


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

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