Investors interested in stocks from the Wireless Equipment sector have probably already heard of Juniper Networks (JNPR) and InterDigital (IDCC). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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.
Juniper Networks has a Zacks Rank of #2 (Buy), while InterDigital has a Zacks Rank of #3 (Hold) right now. This means that JNPR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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.
JNPR currently has a forward P/E ratio of 15.11, while IDCC has a forward P/E of 83.03. We also note that JNPR has a PEG ratio of 2.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IDCC currently has a PEG ratio of 5.54.
Another notable valuation metric for JNPR is its P/B ratio of 1.93. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, IDCC has a P/B of 2.50.
Based on these metrics and many more, JNPR holds a Value grade of B, while IDCC has a Value grade of F.
JNPR stands above IDCC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that JNPR is the superior value option right now.
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Juniper Networks, Inc. (JNPR) : Free Stock Analysis Report
InterDigital, Inc. (IDCC) : Free Stock Analysis Report
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