NUAN or CSOD: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Computer - Software sector might want to consider either Nuance Communications (NUAN) or Cornerstone OnDemand (CSOD). 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.
Nuance Communications and Cornerstone OnDemand are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that NUAN'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 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.
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.
NUAN currently has a forward P/E ratio of 13.93, while CSOD has a forward P/E of 58.38. We also note that NUAN has a PEG ratio of 2.79. 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. CSOD currently has a PEG ratio of 7.30.
Another notable valuation metric for NUAN is its P/B ratio of 2.28. 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, CSOD has a P/B of 47.31.
Based on these metrics and many more, NUAN holds a Value grade of B, while CSOD has a Value grade of F.
NUAN has seen stronger estimate revision activity and sports more attractive valuation metrics than CSOD, so it seems like value investors will conclude that NUAN is the superior option right now.
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Nuance Communications, Inc. (NUAN) : Free Stock Analysis Report
Cornerstone OnDemand, Inc. (CSOD) : Free Stock Analysis Report
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