APPS or FFIV: Which Is the Better Value Stock Right Now?

Investors interested in Internet - Software stocks are likely familiar with Digital Turbine (APPS) and F5 Networks (FFIV). But which of these two stocks presents investors with the better value opportunity right now? 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.

Digital Turbine and F5 Networks are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that APPS'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 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.

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.

APPS currently has a forward P/E ratio of 9.89, while FFIV has a forward P/E of 18.35. We also note that APPS has a PEG ratio of 0.24. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FFIV currently has a PEG ratio of 6.31.

Another notable valuation metric for APPS is its P/B ratio of 2.05. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FFIV has a P/B of 4.62.

These are just a few of the metrics contributing to APPS's Value grade of B and FFIV's Value grade of D.

APPS has seen stronger estimate revision activity and sports more attractive valuation metrics than FFIV, so it seems like value investors will conclude that APPS is the superior option right now.

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Digital Turbine, Inc. (APPS): Free Stock Analysis Report

F5, Inc. (FFIV): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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