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ARRS vs. HIVE: Which Stock Is the Better Value Option?

Zacks Equity Research
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Investors interested in Communication - Components stocks are likely familiar with Arris Group (ARRS) and Aerohive Networks (HIVE). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Arris Group has a Zacks Rank of #2 (Buy), while Aerohive Networks has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ARRS has an improving earnings outlook. However, value investors will care about much more than just this.

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 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.

ARRS currently has a forward P/E ratio of 10.20, while HIVE has a forward P/E of 38.82. We also note that ARRS has a PEG ratio of 1.57. 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. HIVE currently has a PEG ratio of 1.76.

Another notable valuation metric for ARRS is its P/B ratio of 1.86. 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, HIVE has a P/B of 8.80.

These are just a few of the metrics contributing to ARRS's Value grade of A and HIVE's Value grade of D.

ARRS stands above HIVE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ARRS is the superior value option right now.


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