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PERI vs. BCOV: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Internet - Content sector might want to consider either Perion Network (PERI - Free Report) or Brightcove (BCOV - Free Report) . 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.

Right now, Perion Network is sporting a Zacks Rank of #2 (Buy), while Brightcove has a Zacks Rank of #3 (Hold). This means that PERI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 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 58.10, while BCOV has a forward P/E of 189.88. We also note that PERI has a PEG ratio of 9.68. 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. BCOV currently has a PEG ratio of 12.66.

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 6.10.

Based on these metrics and many more, PERI holds a Value grade of A, while BCOV has 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.


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