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CRTO vs. RNG: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Internet - Software and Services stocks have likely encountered both Criteo S.A. (CRTO - Free Report) and RingCentral (RNG - Free Report) . 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Both Criteo S.A. and RingCentral have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

CRTO currently has a forward P/E ratio of 7.50, while RNG has a forward P/E of 226.68. We also note that CRTO has a PEG ratio of 1.50. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RNG currently has a PEG ratio of 13.89.

Another notable valuation metric for CRTO is its P/B ratio of 1.20. 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, RNG has a P/B of 40.66.

These are just a few of the metrics contributing to CRTO's Value grade of A and RNG's Value grade of F.

Both CRTO and RNG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CRTO is the superior value option right now.


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