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IIJI or ETSY: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Internet - Services sector have probably already heard of Internet Initiative Japan and Etsy (ETSY - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Internet Initiative Japan has a Zacks Rank of #2 (Buy), while Etsy has a Zacks Rank of #3 (Hold) right now. This means that IIJI'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.

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.

IIJI currently has a forward P/E ratio of 24.67, while ETSY has a forward P/E of 114.68. We also note that IIJI has a PEG ratio of 1.83. 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. ETSY currently has a PEG ratio of 7.65.

Another notable valuation metric for IIJI is its P/B ratio of 1.41. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ETSY has a P/B of 15.44.

These are just a few of the metrics contributing to IIJI's Value grade of A and ETSY's Value grade of F.

IIJI stands above ETSY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that IIJI is the superior value option right now.


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