Back to top

Image: Bigstock

PERI or DHX: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors with an interest in Internet - Content stocks have likely encountered both Perion Network (PERI - Free Report) and DHI Group (DHX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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 #1 (Strong Buy), while DHI Group has a Zacks Rank of #4 (Sell). This means that PERI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

PERI currently has a forward P/E ratio of 11.21, while DHX has a forward P/E of 97.33. We also note that PERI has a PEG ratio of 0.45. 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. DHX currently has a PEG ratio of 3.89.

Another notable valuation metric for PERI is its P/B ratio of 1.78. 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, DHX has a P/B of 2.64.

These are just a few of the metrics contributing to PERI's Value grade of B and DHX's Value grade of C.

PERI stands above DHX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PERI is the superior value option right now.

In-Depth Zacks Research for the Tickers Above

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

Perion Network Ltd (PERI) - free report >>

DHI Group, Inc. (DHX) - free report >>

Published in