PYPL vs. BL: Which Stock Is the Better Value Option?
Investors interested in stocks from the Internet - Software sector have probably already heard of Paypal (PYPL) and BlackLine (BL). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Paypal and BlackLine are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
PYPL currently has a forward P/E ratio of 19.86, while BL has a forward P/E of 139.43. We also note that PYPL has a PEG ratio of 1.26. 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. BL currently has a PEG ratio of 8.18.
Another notable valuation metric for PYPL is its P/B ratio of 4.54. 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, BL has a P/B of 48.43.
These are just a few of the metrics contributing to PYPL's Value grade of B and BL's Value grade of D.
Both PYPL and BL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PYPL is the superior value option right now.
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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
BlackLine (BL) : Free Stock Analysis Report
