Investors interested in Internet - Content stocks are likely familiar with Shutterstock (SSTK - Free Report) and 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.
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.
Shutterstock and Brightcove are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SSTK is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
SSTK currently has a forward P/E ratio of 29.95, while BCOV has a forward P/E of 123.56. We also note that SSTK has a PEG ratio of 0.91. 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 8.24.
Another notable valuation metric for SSTK is its P/B ratio of 5.23. 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, BCOV has a P/B of 6.30.
These metrics, and several others, help SSTK earn a Value grade of B, while BCOV has been given a Value grade of D.
SSTK 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 SSTK is likely the superior value option right now.