Investors interested in stocks from the Internet - Software sector have probably already heard of Meet Group (MEET) and Mimecast (MIME). But which of these two companies is the best option for those looking for undervalued stocks? 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 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, Meet Group is sporting a Zacks Rank of #2 (Buy), while Mimecast has a Zacks Rank of #3 (Hold). This means that MEET's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
MEET currently has a forward P/E ratio of 11.81, while MIME has a forward P/E of 102.97. We also note that MEET has a PEG ratio of 0.59. 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. MIME currently has a PEG ratio of 5.15.
Another notable valuation metric for MEET is its P/B ratio of 2.13. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MIME has a P/B of 20.56.
Based on these metrics and many more, MEET holds a Value grade of B, while MIME has a Value grade of F.
MEET 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 MEET is likely the superior value option right now.
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MeetMe, Inc. (MEET) : Free Stock Analysis Report
Mimecast Limited (MIME) : Free Stock Analysis Report
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