Yahoo Finance EGAN or INFA: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Internet - Software sector have probably already heard of eGain (EGAN) and Informatica Inc. (INFA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
eGain and Informatica Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EGAN is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
EGAN currently has a forward P/E ratio of 17.85, while INFA has a forward P/E of 25.77. We also note that EGAN has a PEG ratio of 0.89. 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. INFA currently has a PEG ratio of 3.34.
Another notable valuation metric for EGAN is its P/B ratio of 2.88. 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, INFA has a P/B of 3.73.
These are just a few of the metrics contributing to EGAN's Value grade of B and INFA's Value grade of D.
EGAN stands above INFA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EGAN is the superior value option right now.
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eGain Corporation (EGAN) : Free Stock Analysis Report
Informatica Inc. (INFA) : Free Stock Analysis Report
