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ZIXI vs. PFPT: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Security sector have probably already heard of Zix and Proofpoint . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Zix and Proofpoint are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ZIXI has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ZIXI currently has a forward P/E ratio of 16.50, while PFPT has a forward P/E of 56.19. We also note that ZIXI has a PEG ratio of 1.10. 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. PFPT currently has a PEG ratio of 2.31.

Another notable valuation metric for ZIXI is its P/B ratio of 6.57. 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, PFPT has a P/B of 10.05.

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

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

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