ZIXI vs. PANW: Which Stock Should Value Investors Buy Now?
Investors interested in Security stocks are likely familiar with 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Zix has a Zacks Rank of #2 (Buy), while Palo Alto Networks has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ZIXI likely has seen a stronger improvement to its earnings outlook than PANW has recently. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
ZIXI currently has a forward P/E ratio of 12.05, while PANW has a forward P/E of 54.87. We also note that ZIXI has a PEG ratio of 0.80. 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 2.35.
Another notable valuation metric for ZIXI is its P/B ratio of 13.27. 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 37.94.
These metrics, and several others, help ZIXI earn a Value grade of B, while PANW has been given a Value grade of D.
ZIXI has seen stronger estimate revision activity and sports more attractive valuation metrics than PANW, so it seems like value investors will conclude that ZIXI is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Zix Corporation (ZIXI) : Free Stock Analysis Report
Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
To read this article on Zacks.com click here.
