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

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Investors interested in stocks from the Internet - Content sector have probably already heard of Perion Network (PERI - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Perion Network has a Zacks Rank of #2 (Buy), while Brightcove 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 PERI is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

PERI currently has a forward P/E ratio of 41.17, while BCOV has a forward P/E of 122.11. We also note that PERI has a PEG ratio of 6.86. 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. BCOV currently has a PEG ratio of 8.14.

Another notable valuation metric for PERI is its P/B ratio of 1.26. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BCOV has a P/B of 6.23.

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

PERI 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 PERI is likely the superior value option right now.


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