Investors interested in Internet - Software stocks are likely familiar with OneSpan (OSPN) and Adyen N.V. Unsponsored ADR (ADYEY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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, OneSpan has a Zacks Rank of #2 (Buy), while Adyen N.V. Unsponsored ADR has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that OSPN likely has seen a stronger improvement to its earnings outlook than ADYEY has recently. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
OSPN currently has a forward P/E ratio of 11.51, while ADYEY has a forward P/E of 21.38. We also note that OSPN has a PEG ratio of 1.05. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ADYEY currently has a PEG ratio of 1.29.
Another notable valuation metric for OSPN is its P/B ratio of 1.93. 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, ADYEY has a P/B of 5.63.
These are just a few of the metrics contributing to OSPN's Value grade of A and ADYEY's Value grade of D.
OSPN 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 OSPN is likely the superior value option right now.
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ONESPAN INC (OSPN): Free Stock Analysis Report
Adyen N.V. Unsponsored ADR (ADYEY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).