Yahoo Finance ETWO vs. PANW: Which Stock Is the Better Value Option?
Investors interested in stocks from the Internet - Software sector have probably already heard of E2open Parent Holdings, Inc. (ETWO) and Palo Alto Networks (PANW). But which of these two stocks presents investors with the better value opportunity right now? Let's 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, E2open Parent Holdings, Inc. has a Zacks Rank of #2 (Buy), while Palo Alto Networks has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ETWO has an improving earnings outlook. 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.
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.
ETWO currently has a forward P/E ratio of 21.05, while PANW has a forward P/E of 49.30. We also note that ETWO has a PEG ratio of 1.39. 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 2.22.
Another notable valuation metric for ETWO is its P/B ratio of 0.90. 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 22.15.
Based on these metrics and many more, ETWO holds a Value grade of B, while PANW has a Value grade of F.
ETWO sticks out from PANW in both our Zacks Rank and Style Scores models, so value investors will likely feel that ETWO is the better option right now.
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E2open Parent Holdings, Inc. (ETWO) : Free Stock Analysis Report
Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
