Investors looking for stocks in the Computer - Software sector might want to consider either Verint Systems (VRNT) or Intuit (INTU). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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.
Currently, Verint Systems has a Zacks Rank of #1 (Strong Buy), while Intuit 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 VRNT is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
VRNT currently has a forward P/E ratio of 8.43, while INTU has a forward P/E of 30.21. We also note that VRNT has a PEG ratio of 0.70. 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. INTU currently has a PEG ratio of 2.10.
Another notable valuation metric for VRNT is its P/B ratio of 1.86. 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, INTU has a P/B of 8.99.
Based on these metrics and many more, VRNT holds a Value grade of B, while INTU has a Value grade of F.
VRNT is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that VRNT is likely the superior value option right now.
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Today, See These 5 Potential Home Runs >>Verint Systems Inc. (VRNT) : Free Stock Analysis Report
Intuit Inc. (INTU) : Free Stock Analysis Report
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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.
