Investors interested in Wireless Equipment stocks are likely familiar with Juniper Networks (JNPR) and InterDigital (IDCC). 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.
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.
Right now, Juniper Networks is sporting a Zacks Rank of #2 (Buy), while InterDigital 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 JNPR is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
JNPR currently has a forward P/E ratio of 15.11, while IDCC has a forward P/E of 115.93. We also note that JNPR has a PEG ratio of 2.44. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IDCC currently has a PEG ratio of 7.73.
Another notable valuation metric for JNPR is its P/B ratio of 1.90. 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, IDCC has a P/B of 2.72.
These metrics, and several others, help JNPR earn a Value grade of B, while IDCC has been given 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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