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VRNT vs. CSOD: Which Stock Is the Better Value Option?

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Investors with an interest in Computer - Software stocks have likely encountered both Verint Systems (VRNT - Free Report) and Cornerstone OnDemand . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Verint Systems and Cornerstone OnDemand are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that VRNT has an improving earnings outlook. 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.

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.

VRNT currently has a forward P/E ratio of 13.94, while CSOD has a forward P/E of 34.52. We also note that VRNT has a PEG ratio of 1. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CSOD currently has a PEG ratio of 2.01.

Another notable valuation metric for VRNT is its P/B ratio of 2.55. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CSOD has a P/B of 9.60.

Based on these metrics and many more, VRNT holds a Value grade of B, while CSOD has a Value grade of C.

VRNT sticks out from CSOD in both our Zacks Rank and Style Scores models, so value investors will likely feel that VRNT is the better option right now.


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