Investors interested in Internet - Software stocks are likely familiar with ZoomInfo (GTM) and Autodesk (ADSK). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, ZoomInfo is sporting a Zacks Rank of #2 (Buy), while Autodesk has a Zacks Rank of #3 (Hold). This means that GTM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
GTM currently has a forward P/E ratio of 10.29, while ADSK has a forward P/E of 31.58. We also note that GTM has a PEG ratio of 1.16. 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. ADSK currently has a PEG ratio of 2.00.
Another notable valuation metric for GTM is its P/B ratio of 2.04. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ADSK has a P/B of 24.88.
These metrics, and several others, help GTM earn a Value grade of B, while ADSK has been given a Value grade of F.
GTM 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 GTM is likely the superior value option right now.
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ZoomInfo Technologies Inc. (GTM): Free Stock Analysis Report Autodesk, Inc. (ADSK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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