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SNPS or INTU: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Computer - Software sector have probably already heard of Synopsys (SNPS - Free Report) and Intuit (INTU - Free Report) . 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.

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.

Right now, Synopsys is sporting a Zacks Rank of #2 (Buy), while Intuit has a Zacks Rank of #4 (Sell). This means that SNPS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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 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.

SNPS currently has a forward P/E ratio of 32.56, while INTU has a forward P/E of 40.35. We also note that SNPS has a PEG ratio of 2.20. 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. INTU currently has a PEG ratio of 3.16.

Another notable valuation metric for SNPS is its P/B ratio of 6.02. 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, INTU has a P/B of 20.10.

These metrics, and several others, help SNPS earn a Value grade of B, while INTU has been given a Value grade of D.

SNPS sticks out from INTU in both our Zacks Rank and Style Scores models, so value investors will likely feel that SNPS is the better option right now.


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