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

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Investors with an interest in Internet - Software stocks have likely encountered both VTEX (VTEX - 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.

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 F5 Networks 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 VTEX is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

VTEX currently has a forward P/E ratio of 20.23, while FFIV has a forward P/E of 26.54. We also note that VTEX has a PEG ratio of 0.52. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FFIV currently has a PEG ratio of 3.54.

Another notable valuation metric for VTEX is its P/B ratio of 3.18. 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 6.97.

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

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

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