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VTEX vs. ADYEY: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Internet - Software sector might want to consider either VTEX (VTEX - Free Report) or Adyen N.V. Unsponsored ADR (ADYEY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Currently, VTEX has a Zacks Rank of #2 (Buy), while Adyen N.V. Unsponsored ADR has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that VTEX likely has seen a stronger improvement to its earnings outlook than ADYEY has recently. But this is just one piece of the puzzle for value investors.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

VTEX currently has a forward P/E ratio of 17.18, while ADYEY has a forward P/E of 24.16. We also note that VTEX has a PEG ratio of 0.44. 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 1.43.

Another notable valuation metric for VTEX is its P/B ratio of 2.7. 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, ADYEY has a P/B of 6.31.

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

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

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