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STX vs. NTAP: Which Stock Is the Better Value Option?

Zacks Equity Research
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Investors interested in Computer- Storage Devices stocks are likely familiar with Seagate (STX) and NetApp (NTAP). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Seagate has a Zacks Rank of #2 (Buy), while NetApp has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that STX is likely seeing its earnings outlook improve to a greater extent. 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.

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.

STX currently has a forward P/E ratio of 8.52, while NTAP has a forward P/E of 19.66. We also note that STX has a PEG ratio of 0.64. 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. NTAP currently has a PEG ratio of 1.42.

Another notable valuation metric for STX is its P/B ratio of 9.15. 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, NTAP has a P/B of 10.82.

These are just a few of the metrics contributing to STX's Value grade of A and NTAP's Value grade of C.

STX has seen stronger estimate revision activity and sports more attractive valuation metrics than NTAP, so it seems like value investors will conclude that STX is the superior option right now.


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Seagate Technology PLC (STX) : Free Stock Analysis Report
 
NetApp, Inc. (NTAP) : Free Stock Analysis Report
 
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