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HEAR or ANET: Which Is the Better Value Stock Right Now?

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Investors with an interest in Communication - Components stocks have likely encountered both Turtle Beach (HEAR - Free Report) and Arista Networks (ANET - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both Turtle Beach and Arista Networks are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.

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.

HEAR currently has a forward P/E ratio of 16.75, while ANET has a forward P/E of 34.98. We also note that HEAR has a PEG ratio of 1.05. 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. ANET currently has a PEG ratio of 2.

Another notable valuation metric for HEAR is its P/B ratio of 3.07. 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, ANET has a P/B of 11.28.

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

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


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