Investors with an interest in Internet - Software stocks have likely encountered both Nice (NICE) and Adyen N.V. Unsponsored ADR (ADYEY). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Nice and Adyen N.V. Unsponsored ADR are both sporting a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
NICE currently has a forward P/E ratio of 12.84, while ADYEY has a forward P/E of 45.12. We also note that NICE has a PEG ratio of 1.17. 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. ADYEY currently has a PEG ratio of 2.25.
Another notable valuation metric for NICE is its P/B ratio of 2.87. 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, ADYEY has a P/B of 12.49.
Based on these metrics and many more, NICE holds a Value grade of B, while ADYEY has a Value grade of F.
Both NICE and ADYEY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NICE is the superior value option right now.
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Nice (NICE): Free Stock Analysis Report Adyen N.V. Unsponsored ADR (ADYEY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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