Back to top

Image: Bigstock

PRGS vs. INTU: Which Stock Is the Better Value Option?

Read MoreHide Full Article

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 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.

Right now, Progress Software is sporting a Zacks Rank of #2 (Buy), while Intuit has a Zacks Rank of #4 (Sell). This means that PRGS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

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 7.35, while INTU has a forward P/E of 22.69. We also note that PRGS has a PEG ratio of 1.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. INTU currently has a PEG ratio of 1.60.

Another notable valuation metric for PRGS is its P/B ratio of 3.83. 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, INTU has a P/B of 7.56.

Based on these metrics and many more, PRGS holds a Value grade of A, while INTU has a Value grade of D.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Intuit Inc. (INTU) - free report >>

Progress Software Corporation (PRGS) - free report >>

Published in