Investors interested in Internet - Software stocks are likely familiar with 8x8 (EGHT) and Five9 (FIVN). 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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
8x8 has a Zacks Rank of #2 (Buy), while Five9 has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that EGHT likely has seen a stronger improvement to its earnings outlook than FIVN has recently. But this is just one factor that value investors are interested in.
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.
EGHT currently has a forward P/E ratio of 8.48, while FIVN has a forward P/E of 16.57. We also note that EGHT has a PEG ratio of 0.73. 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. FIVN currently has a PEG ratio of 1.06.
Another notable valuation metric for EGHT is its P/B ratio of 3.32. 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, FIVN has a P/B of 5.64.
These are just a few of the metrics contributing to EGHT's Value grade of B and FIVN's Value grade of D.
EGHT sticks out from FIVN in both our Zacks Rank and Style Scores models, so value investors will likely feel that EGHT is the better option right now.
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Today, See These 5 Potential Home Runs >>8x8 Inc (EGHT) : Free Stock Analysis Report
Five9, Inc. (FIVN) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
