Yahoo Finance EGAN vs. INFA: Which Stock Is the Better Value Option?
Investors with an interest in Internet - Software stocks have likely encountered both eGain (EGAN) and Informatica Inc. (INFA). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
eGain has a Zacks Rank of #2 (Buy), while Informatica Inc. has a Zacks Rank of #3 (Hold) right now. This means that EGAN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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 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 18.39, while INFA has a forward P/E of 26.86. We also note that EGAN has a PEG ratio of 0.92. 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. INFA currently has a PEG ratio of 3.48.
Another notable valuation metric for EGAN is its P/B ratio of 2.97. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, INFA has a P/B of 3.89.
Based on these metrics and many more, EGAN holds a Value grade of B, while INFA has a Value grade of D.
EGAN 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 EGAN is likely the superior value option right now.
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eGain Corporation (EGAN) : Free Stock Analysis Report
Informatica Inc. (INFA) : Free Stock Analysis Report
