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NLOK or AAXN: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors with an interest in Security and Safety Services stocks have likely encountered both NortonLifeLock (NLOK) and Axon Enterprise (AAXN). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, NortonLifeLock has a Zacks Rank of #1 (Strong Buy), while Axon Enterprise has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that NLOK likely has seen a stronger improvement to its earnings outlook than AAXN has recently. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

NLOK currently has a forward P/E ratio of 17.13, while AAXN has a forward P/E of 58.06. We also note that NLOK has a PEG ratio of 3.67. 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. AAXN currently has a PEG ratio of 3.87.

Another notable valuation metric for NLOK is its P/B ratio of 1.31. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, AAXN has a P/B of 7.42.

These are just a few of the metrics contributing to NLOK's Value grade of B and AAXN's Value grade of F.

NLOK stands above AAXN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NLOK is the superior value option right now.

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