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VRNT vs. CSOD: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Computer - Software sector might want to consider either Verint Systems (VRNT - Free Report) or Cornerstone OnDemand . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both Verint Systems and Cornerstone OnDemand are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

VRNT currently has a forward P/E ratio of 17.71, while CSOD has a forward P/E of 31.24. We also note that VRNT has a PEG ratio of 1.26. 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 1.82.

Another notable valuation metric for VRNT is its P/B ratio of 3.11. 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, CSOD has a P/B of 11.73.

These metrics, and several others, help VRNT earn a Value grade of B, while CSOD has been given a Value grade of D.

Both VRNT and CSOD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that VRNT is the superior value option right now.


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