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STNE or FFIV: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Internet - Software sector have probably already heard of StoneCo Ltd. (STNE - Free Report) and F5 Networks (FFIV - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, StoneCo Ltd. has a Zacks Rank of #2 (Buy), while F5 Networks has a Zacks Rank of #5 (Strong Sell). This means that STNE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
STNE currently has a forward P/E ratio of 9.80, while FFIV has a forward P/E of 15.96. We also note that STNE has a PEG ratio of 0.32. 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. FFIV currently has a PEG ratio of 5.93.
Another notable valuation metric for STNE is its P/B ratio of 2.23. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FFIV has a P/B of 3.82.
These metrics, and several others, help STNE earn a Value grade of B, while FFIV has been given a Value grade of F.
STNE has seen stronger estimate revision activity and sports more attractive valuation metrics than FFIV, so it seems like value investors will conclude that STNE is the superior option right now.
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STNE or FFIV: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Internet - Software sector have probably already heard of StoneCo Ltd. (STNE - Free Report) and F5 Networks (FFIV - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, StoneCo Ltd. has a Zacks Rank of #2 (Buy), while F5 Networks has a Zacks Rank of #5 (Strong Sell). This means that STNE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
STNE currently has a forward P/E ratio of 9.80, while FFIV has a forward P/E of 15.96. We also note that STNE has a PEG ratio of 0.32. 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. FFIV currently has a PEG ratio of 5.93.
Another notable valuation metric for STNE is its P/B ratio of 2.23. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FFIV has a P/B of 3.82.
These metrics, and several others, help STNE earn a Value grade of B, while FFIV has been given a Value grade of F.
STNE has seen stronger estimate revision activity and sports more attractive valuation metrics than FFIV, so it seems like value investors will conclude that STNE is the superior option right now.