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 offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Currently, StoneCo Ltd. has a Zacks Rank of #2 (Buy), while Informatica Inc. has a Zacks Rank of #3 (Hold). This means that STNE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
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.
STNE currently has a forward P/E ratio of 12.43, while INFA has a forward P/E of 25.09. We also note that STNE has a PEG ratio of 0.23. 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. INFA currently has a PEG ratio of 4.43.
Another notable valuation metric for STNE is its P/B ratio of 1.10. 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, INFA has a P/B of 3.18.
These metrics, and several others, help STNE earn a Value grade of A, while INFA has been given a Value grade of D.
STNE stands above INFA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STNE is the superior value option right now.
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StoneCo Ltd. (STNE) : Free Stock Analysis Report
Informatica Inc. (INFA) : Free Stock Analysis Report
