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VRNT or CSOD: Which Is the Better Value Stock Right Now?

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Investors interested in Computer - Software stocks are likely familiar with Verint Systems (VRNT - Free Report) and Cornerstone OnDemand . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Verint Systems has a Zacks Rank of #2 (Buy), while Cornerstone OnDemand has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VRNT is likely seeing its earnings outlook improve to a greater extent. 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.

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.

VRNT currently has a forward P/E ratio of 15.56, while CSOD has a forward P/E of 51.75. We also note that VRNT has a PEG ratio of 1.41. 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. CSOD currently has a PEG ratio of 6.47.

Another notable valuation metric for VRNT is its P/B ratio of 2.95. 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, CSOD has a P/B of 42.63.

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

VRNT 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 VRNT is likely the superior value option right now.


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