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MEET or MIME: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Internet - Software sector might want to consider either Meet Group (MEET) or Mimecast (MIME - 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.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Meet Group has a Zacks Rank of #2 (Buy), while Mimecast has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MEET likely has seen a stronger improvement to its earnings outlook than MIME has recently. But this is just one piece of the puzzle for value investors.

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 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.

MEET currently has a forward P/E ratio of 10.48, while MIME has a forward P/E of 172.18. We also note that MEET has a PEG ratio of 0.52. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MIME currently has a PEG ratio of 8.61.

Another notable valuation metric for MEET is its P/B ratio of 1.89. 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, MIME has a P/B of 18.61.

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

MEET is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MEET is likely the superior value option right now.


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