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ORCL vs. BLKB: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors interested in stocks from the Computer - Software sector have probably already heard of Oracle (ORCL) and Blackbaud (BLKB). 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, Oracle is sporting a Zacks Rank of #2 (Buy), while Blackbaud has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ORCL likely has seen a stronger improvement to its earnings outlook than BLKB has recently. 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.

ORCL currently has a forward P/E ratio of 15.74, while BLKB has a forward P/E of 35.74. We also note that ORCL has a PEG ratio of 1.61. 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. BLKB currently has a PEG ratio of 4.26.

Another notable valuation metric for ORCL is its P/B ratio of 9.24. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BLKB has a P/B of 10.49.

Based on these metrics and many more, ORCL holds a Value grade of B, while BLKB has a Value grade of F.

ORCL sticks out from BLKB in both our Zacks Rank and Style Scores models, so value investors will likely feel that ORCL is the better option right now.

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Oracle Corporation (ORCL) : Free Stock Analysis Report
Blackbaud, Inc. (BLKB) : Free Stock Analysis Report
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