STNE or INFA: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Internet - Software sector might want to consider either StoneCo Ltd. (STNE) or Informatica Inc. (INFA). 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 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.
StoneCo Ltd. has a Zacks Rank of #1 (Strong Buy), while Informatica Inc. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that STNE has an improving earnings outlook. But this is only part of the picture 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.
STNE currently has a forward P/E ratio of 18, while INFA has a forward P/E of 25.06. We also note that STNE has a PEG ratio of 0.33. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. INFA currently has a PEG ratio of 6.75.
Another notable valuation metric for STNE is its P/B ratio of 1.54. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, INFA has a P/B of 2.59.
These are just a few of the metrics contributing to STNE's Value grade of B and INFA's Value grade of D.
STNE sticks out from INFA in both our Zacks Rank and Style Scores models, so value investors will likely feel that STNE is the better option right now.
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StoneCo Ltd. (STNE) : Free Stock Analysis Report
Informatica Inc. (INFA) : Free Stock Analysis Report
