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MGNI or INFA: Which Is the Better Value Stock Right Now?

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Investors with an interest in Internet - Software stocks have likely encountered both Magnite (MGNI - Free Report) and Informatica Inc. (INFA - 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.

Magnite and Informatica Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MGNI has an improving earnings outlook. But this is only part of the picture for value investors.

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.

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.

MGNI currently has a forward P/E ratio of 23.01, while INFA has a forward P/E of 24.37. We also note that MGNI has a PEG ratio of 0.62. 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. INFA currently has a PEG ratio of 2.27.

Another notable valuation metric for MGNI is its P/B ratio of 3.17. 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, INFA has a P/B of 3.41.

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

MGNI sticks out from INFA in both our Zacks Rank and Style Scores models, so value investors will likely feel that MGNI is the better option right now.


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Informatica Inc. (INFA) - free report >>

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