Yahoo Finance EGHT vs. NEWR: Which Stock Should Value Investors Buy Now?
Investors interested in Internet - Software stocks are likely familiar with 8x8 (EGHT) and New Relic (NEWR). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, 8x8 has a Zacks Rank of #2 (Buy), while New Relic has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that EGHT likely has seen a stronger improvement to its earnings outlook than NEWR has recently. But this is just one factor that value investors are interested in.
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.
EGHT currently has a forward P/E ratio of 6.78, while NEWR has a forward P/E of 57.71. We also note that EGHT has a PEG ratio of 0.31. 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. NEWR currently has a PEG ratio of 2.15.
Another notable valuation metric for EGHT is its P/B ratio of 4.14. 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, NEWR has a P/B of 15.83.
Based on these metrics and many more, EGHT holds a Value grade of B, while NEWR has a Value grade of F.
EGHT has seen stronger estimate revision activity and sports more attractive valuation metrics than NEWR, so it seems like value investors will conclude that EGHT is the superior option right now.
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8x8 Inc (EGHT) : Free Stock Analysis Report
New Relic, Inc. (NEWR) : Free Stock Analysis Report
