Which stock offers the better value option?

Investors interested in computer software stocks have likely come across both Verint Systems (VRNT) and Cornerstone OnDemand (CSOD). But which of these two stocks currently offers value investors the better value for money? We need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model combines an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank places an emphasis on earnings estimates and estimate revisions, while our Style Scores aim to identify stocks with specific traits.

Verint Systems and Cornerstone OnDemand currently sport Zacks Ranks #2 (Buy) and #4 (Sell), respectively. The Zacks Rank favors stocks that have recently seen positive earnings estimate revisions, so investors can take comfort in knowing that VRNT has an improved earnings outlook. However, for value investors, this is only one piece of the puzzle.

Value investors analyze a variety of traditional and proven metrics to find companies that they believe are undervalued at their current price levels.

The Value category of the Style Scores system identifies undervalued companies using a number of key metrics, including the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other fundamentals that help us determine a company’s fair value.

VRNT currently has a forward P/E ratio of 13.94, while CSOD has a forward P/E ratio of 34.52. We also note that VRNT has a PEG ratio of 1. This popular metric is similar to the widely known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. CSOD currently has a PEG ratio of 2.01.

Another important valuation metric for VRNT is its P/B ratio of 2.55. 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. For comparison, CSOD has a P/B ratio of 9.60.

Based on these and many other metrics, VRNT receives a B rating, while CSOD receives a C rating.

VRNT stands out in both our Zacks Rank and Style Scores from CSOD, so value investors likely consider VRNT the better option right now.

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Verint Systems Inc. (VRNT): Free Stock Analysis Report

Cornerstone OnDemand, Inc. (CSOD): Free Stock Analysis Report

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