Investors looking for stocks in the Internet - Content sector might want to consider either Perion Network (PERI) or Brightcove (BCOV). 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.
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.
Perion Network has a Zacks Rank of #1 (Strong Buy), while Brightcove has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PERI has an improving earnings outlook. But this is only part of the picture 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.
PERI currently has a forward P/E ratio of 12.77, while BCOV has a forward P/E of 40.80. We also note that PERI has a PEG ratio of 2.13. 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. BCOV currently has a PEG ratio of 2.72.
Another notable valuation metric for PERI is its P/B ratio of 1.30. 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, BCOV has a P/B of 4.54.
These are just a few of the metrics contributing to PERI's Value grade of A and BCOV's Value grade of D.
PERI sticks out from BCOV in both our Zacks Rank and Style Scores models, so value investors will likely feel that PERI is the better option right now.