Investors looking for stocks in the Internet - Software sector might want to consider either NIC (EGOV) or Apptio (APTI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both NIC and Apptio 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 only part of the picture for value investors.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
EGOV currently has a forward P/E ratio of 16.05, while APTI has a forward P/E of 472.13. We also note that EGOV has a PEG ratio of 1.61. 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. APTI currently has a PEG ratio of 37.77.
Another notable valuation metric for EGOV is its P/B ratio of 4.39. 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, APTI has a P/B of 10.87.
These are just a few of the metrics contributing to EGOV's Value grade of B and APTI's Value grade of F.
Both EGOV and APTI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EGOV is the superior value option right now.
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NIC Inc. (EGOV) : Free Stock Analysis Report
Apptio Inc. (APTI) : Free Stock Analysis Report
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