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SOGO or COUP: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Internet - Software sector have probably already heard of Sogou (SOGO) and COUPA SOFTWARE (COUP - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both Sogou and COUPA SOFTWARE are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.

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.

SOGO currently has a forward P/E ratio of 19.76, while COUP has a forward P/E of 755.06. We also note that SOGO has a PEG ratio of 0.98. 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. COUP currently has a PEG ratio of 20.35.

Another notable valuation metric for SOGO is its P/B ratio of 1.88. 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 16.72.

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

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


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