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JCOM vs. COUP: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Internet - Software sector might want to consider either j2 Global or COUPA SOFTWARE . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

j2 Global and COUPA SOFTWARE are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that JCOM has an improving earnings outlook. But this is just one factor that value investors are interested in.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

JCOM currently has a forward P/E ratio of 12.93, while COUP has a forward P/E of 1,225.95. We also note that JCOM has a PEG ratio of 1.62. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. COUP currently has a PEG ratio of 40.86.

Another notable valuation metric for JCOM is its P/B ratio of 4.17. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, COUP has a P/B of 19.61.

These metrics, and several others, help JCOM earn a Value grade of B, while COUP has been given a Value grade of F.

JCOM sticks out from COUP in both our Zacks Rank and Style Scores models, so value investors will likely feel that JCOM is the better option right now.

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