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VRNT vs. CSOD: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 mins read

Investors interested in stocks from the Computer - Software sector have probably already heard of Verint Systems (VRNT) and Cornerstone OnDemand (CSOD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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

Verint Systems has a Zacks Rank of #2 (Buy), while Cornerstone OnDemand has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VRNT is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

VRNT currently has a forward P/E ratio of 14.08, while CSOD has a forward P/E of 33.56. We also note that VRNT has a PEG ratio of 1.01. 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. CSOD currently has a PEG ratio of 1.95.

Another notable valuation metric for VRNT is its P/B ratio of 2.61. 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, CSOD has a P/B of 9.35.

Based on these metrics and many more, VRNT holds a Value grade of B, while CSOD has a Value grade of C.

VRNT has seen stronger estimate revision activity and sports more attractive valuation metrics than CSOD, so it seems like value investors will conclude that VRNT is the superior 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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Zacks Investment Research