Investors with an interest in Internet - Software stocks have likely encountered both j2 Global (JCOM - Free Report) and Apptio . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, both j2 Global and Apptio are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
JCOM currently has a forward P/E ratio of 13.10, while APTI has a forward P/E of 748.46. We also note that JCOM has a PEG ratio of 1.64. 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. APTI currently has a PEG ratio of 59.88.
Another notable valuation metric for JCOM is its P/B ratio of 3.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, APTI has a P/B of 11.48.
Based on these metrics and many more, JCOM holds a Value grade of B, while APTI has a Value grade of F.
Both JCOM and APTI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that JCOM is the superior value option right now.