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ZIXI or PANW: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Security sector have probably already heard of Zix (ZIXI) 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Zix and Palo Alto Networks are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that ZIXI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ZIXI currently has a forward P/E ratio of 10.30, while PANW has a forward P/E of 44.42. We also note that ZIXI has a PEG ratio of 0.69. 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. PANW currently has a PEG ratio of 1.90.

Another notable valuation metric for ZIXI is its P/B ratio of 9.19. 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, PANW has a P/B of 34.57.

Based on these metrics and many more, ZIXI holds a Value grade of B, while PANW has a Value grade of D.

ZIXI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ZIXI is likely the superior value option right now.


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Zix Corporation (ZIXI) : Free Stock Analysis Report
 
Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
 
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