PRGS vs. INTU: Which Stock Is the Better Value Option?
Investors with an interest in Computer - Software stocks have likely encountered both Progress Software (PRGS) and Intuit $INTU (INTU). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Progress Software and Intuit are both sporting a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PRGS currently has a forward P/E ratio of 4.63, while INTU has a forward P/E of 15.95. We also note that PRGS has a PEG ratio of 0.93. 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. INTU currently has a PEG ratio of 1.12.
Another notable valuation metric for PRGS is its P/B ratio of 2.34. 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, INTU has a P/B of 5.36.
These metrics, and several others, help PRGS earn a Value grade of A, while INTU has been given a Value grade of D.
Both PRGS and INTU are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PRGS is the superior value option right now.
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Progress Software Corporation (PRGS): Free Stock Analysis Report
Intuit Inc. (INTU): Free Stock Analysis Report
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