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GTM or FFIV: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Internet - Software sector might want to consider either ZoomInfo (GTM - Free Report) or F5 Networks (FFIV - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

ZoomInfo and F5 Networks are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. This means that GTM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

GTM currently has a forward P/E ratio of 11.63, while FFIV has a forward P/E of 16.02. We also note that GTM has a PEG ratio of 1.64. 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. FFIV currently has a PEG ratio of 5.96.

Another notable valuation metric for GTM is its P/B ratio of 2.43. 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, FFIV has a P/B of 3.86.

These metrics, and several others, help GTM earn a Value grade of B, while FFIV has been given a Value grade of F.

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


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