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EGHT or ADYEY: Which Is the Better Value Stock Right Now?

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Investors with an interest in Internet - Software stocks have likely encountered both 8x8 (EGHT - Free Report) and Adyen N.V. Unsponsored ADR (ADYEY - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

8x8 and Adyen N.V. Unsponsored ADR are both sporting a Zacks Rank of #2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

EGHT currently has a forward P/E ratio of 5.92, while ADYEY has a forward P/E of 42.46. We also note that EGHT has a PEG ratio of 0.68. 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. ADYEY currently has a PEG ratio of 2.12.

Another notable valuation metric for EGHT is its P/B ratio of 1.94. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ADYEY has a P/B of 11.75.

Based on these metrics and many more, EGHT holds a Value grade of A, while ADYEY has a Value grade of F.

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


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