Investors looking for stocks in the Internet - Software sector might want to consider either NIC (EGOV - Free Report) or Apptio (APTI - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both NIC and Apptio have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
EGOV currently has a forward P/E ratio of 15.46, while APTI has a forward P/E of 475.75. We also note that EGOV has a PEG ratio of 1.55. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. APTI currently has a PEG ratio of 38.06.
Another notable valuation metric for EGOV is its P/B ratio of 4.20. 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, APTI has a P/B of 10.98.
These are just a few of the metrics contributing to EGOV's Value grade of B and APTI's Value grade of F.
Both EGOV and APTI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EGOV is the superior value option right now.