Investors interested in stocks from the Internet - Content sector have probably already heard of Perion Network (PERI) and Brightcove (BCOV). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Right now, Perion Network is sporting a Zacks Rank of #1 (Strong Buy), while Brightcove has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PERI likely has seen a stronger improvement to its earnings outlook than BCOV has recently. But this is only part of the picture for value investors.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
PERI currently has a forward P/E ratio of 14.19, while BCOV has a forward P/E of 41.63. We also note that PERI has a PEG ratio of 2.37. 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. BCOV currently has a PEG ratio of 2.78.
Another notable valuation metric for PERI is its P/B ratio of 1.44. 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, BCOV has a P/B of 4.63.
These metrics, and several others, help PERI earn a Value grade of A, while BCOV has been given a Value grade of D.
PERI 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 PERI is likely the superior value option right now.
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Perion Network Ltd (PERI) : Free Stock Analysis Report
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