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

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Investors looking for stocks in the Computer - Software sector might want to consider either Verint Systems (VRNT - Free Report) or Intuit (INTU - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Verint Systems has a Zacks Rank of #2 (Buy), while Intuit has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VRNT is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

VRNT currently has a forward P/E ratio of 11.74, while INTU has a forward P/E of 39.86. We also note that VRNT has a PEG ratio of 0.98. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. INTU currently has a PEG ratio of 2.70.

Another notable valuation metric for VRNT is its P/B ratio of 2.44. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, INTU has a P/B of 10.76.

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

VRNT 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 VRNT is likely the superior value option right now.


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