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PRGS vs. INTU: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Computer - Software stocks have likely encountered both Progress Software (PRGS - Free Report) and Intuit (INTU - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Progress Software has a Zacks Rank of #2 (Buy), while Intuit has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PRGS is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

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.

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.

PRGS currently has a forward P/E ratio of 8.13, while INTU has a forward P/E of 29.58. We also note that PRGS has a PEG ratio of 1.63. 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. INTU currently has a PEG ratio of 1.96.

Another notable valuation metric for PRGS is its P/B ratio of 3.95. 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, INTU has a P/B of 9.66.

These are just a few of the metrics contributing to PRGS's Value grade of A and INTU's Value grade of D.

PRGS has seen stronger estimate revision activity and sports more attractive valuation metrics than INTU, so it seems like value investors will conclude that PRGS is the superior option right now.


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