STNE vs. PANW: Which Stock Is the Better Value Option?
Investors interested in stocks from the Internet - Software sector have probably already heard of StoneCo Ltd. (STNE) and Palo Alto Networks (PANW). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, StoneCo Ltd. is sporting a Zacks Rank of #2 (Buy), while Palo Alto Networks has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that STNE likely has seen a stronger improvement to its earnings outlook than PANW has recently. But this is just one piece of the puzzle 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
STNE currently has a forward P/E ratio of 24.59, while PANW has a forward P/E of 48.14. We also note that STNE has a PEG ratio of 0.73. 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. PANW currently has a PEG ratio of 1.53.
Another notable valuation metric for STNE is its P/B ratio of 1.76. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, PANW has a P/B of 80.11.
These metrics, and several others, help STNE earn a Value grade of A, while PANW has been given a Value grade of D.
STNE has seen stronger estimate revision activity and sports more attractive valuation metrics than PANW, so it seems like value investors will conclude that STNE is the superior option right now.
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StoneCo Ltd. (STNE) : Free Stock Analysis Report
Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
