EGHT or FFIV: Which Is the Better Value Stock Right Now?
Investors with an interest in Internet - Software stocks have likely encountered both 8x8 (EGHT) and F5 Networks (FFIV). 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.
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.
Right now, 8x8 is sporting a Zacks Rank of #2 (Buy), while F5 Networks has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EGHT is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
EGHT currently has a forward P/E ratio of 5.39, while FFIV has a forward P/E of 12.28. We also note that EGHT has a PEG ratio of 0.21. 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. FFIV currently has a PEG ratio of 2.25.
Another notable valuation metric for EGHT is its P/B ratio of 2.62. 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, FFIV has a P/B of 3.22.
Based on these metrics and many more, EGHT holds a Value grade of B, while FFIV has a Value grade of C.
EGHT 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 EGHT is likely the superior value option right now.
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8x8 Inc (EGHT) : Free Stock Analysis Report
F5, Inc. (FFIV) : Free Stock Analysis Report
