Investors with an interest in Security stocks have likely encountered both Check Point Software (CHKP) and CyberArk (CYBR). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Check Point Software has a Zacks Rank of #2 (Buy), while CyberArk has a Zacks Rank of #3 (Hold). This means that CHKP's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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 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.
CHKP currently has a forward P/E ratio of 19.01, while CYBR has a forward P/E of 216.80. We also note that CHKP has a PEG ratio of 2.38. 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. CYBR currently has a PEG ratio of 17.70.
Another notable valuation metric for CHKP is its P/B ratio of 4.52. 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, CYBR has a P/B of 6.09.
These metrics, and several others, help CHKP earn a Value grade of B, while CYBR has been given a Value grade of D.
CHKP stands above CYBR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CHKP is the superior value option right now.
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Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report
CyberArk Software Ltd. (CYBR) : Free Stock Analysis Report
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