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

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Investors interested in Internet - Content stocks are likely familiar with Shutterstock (SSTK - Free Report) and Brightcove (BCOV - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 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.

Shutterstock has a Zacks Rank of #2 (Buy), while Brightcove has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that SSTK likely has seen a stronger improvement to its earnings outlook than BCOV has recently. But this is just one factor that value investors are interested in.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

SSTK currently has a forward P/E ratio of 29.39, while BCOV has a forward P/E of 89.33. We also note that SSTK has a PEG ratio of 1.22. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BCOV currently has a PEG ratio of 5.96.

Another notable valuation metric for SSTK is its P/B ratio of 3.90. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BCOV has a P/B of 4.57.

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

SSTK 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 SSTK is likely the superior value option right now.


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