Back to top

Image: Bigstock

UPLD vs. INFA: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Internet - Software sector might want to consider either Upland Software (UPLD - Free Report) or Informatica Inc. (INFA - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Upland Software is sporting a Zacks Rank of #2 (Buy), while Informatica Inc. has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that UPLD has an improving earnings outlook. However, value investors will care about much more than just this.

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 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.

UPLD currently has a forward P/E ratio of 8.51, while INFA has a forward P/E of 27.73. We also note that UPLD has a PEG ratio of 0.85. 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. INFA currently has a PEG ratio of 1.40.

Another notable valuation metric for UPLD is its P/B ratio of 1.58. 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, INFA has a P/B of 4.97.

These are just a few of the metrics contributing to UPLD's Value grade of B and INFA's Value grade of D.

UPLD 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 UPLD is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Informatica Inc. (INFA) - free report >>

Upland Software, Inc. (UPLD) - free report >>

Published in