ALIT or FFIV: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Internet - Software sector might want to consider either Alight, Inc. (ALIT) or F5 Networks (FFIV). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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, both Alight, Inc. and F5 Networks are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ALIT currently has a forward P/E ratio of 12.44, while FFIV has a forward P/E of 14.70. We also note that ALIT has a PEG ratio of 0.96. 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. FFIV currently has a PEG ratio of 2.07.
Another notable valuation metric for ALIT is its P/B ratio of 1.05. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FFIV has a P/B of 3.81.
Based on these metrics and many more, ALIT holds a Value grade of B, while FFIV has a Value grade of C.
Both ALIT and FFIV are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ALIT is the superior value option right now.
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Alight, Inc. (ALIT) : Free Stock Analysis Report
F5, Inc. (FFIV) : Free Stock Analysis Report
