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PERI vs. BCOV: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Internet - Content sector have probably already heard of Perion Network (PERI - Free Report) and Brightcove (BCOV - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, Perion Network is sporting a Zacks Rank of #1 (Strong Buy), while Brightcove has a Zacks Rank of #3 (Hold). This means that PERI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

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 7.85, while BCOV has a forward P/E of 28.35. We also note that PERI has a PEG ratio of 1.31. 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. BCOV currently has a PEG ratio of 1.89.

Another notable valuation metric for PERI is its P/B ratio of 0.83. 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, BCOV has a P/B of 3.41.

Based on these metrics and many more, PERI holds a Value grade of B, while BCOV has a Value grade of D.

PERI has seen stronger estimate revision activity and sports more attractive valuation metrics than BCOV, so it seems like value investors will conclude that PERI is the superior option right now.


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