META or BL: Which Is the Better Value Stock Right Now?
Investors with an interest in Internet - Software stocks have likely encountered both Meta Platforms (META) and BlackLine (BL). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Meta Platforms and BlackLine are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that META's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
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.
META currently has a forward P/E ratio of 19.29, while BL has a forward P/E of 128.19. We also note that META has a PEG ratio of 1.85. 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. BL currently has a PEG ratio of 6.57.
Another notable valuation metric for META is its P/B ratio of 3.92. 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, BL has a P/B of 56.47.
Based on these metrics and many more, META holds a Value grade of B, while BL has a Value grade of D.
META has seen stronger estimate revision activity and sports more attractive valuation metrics than BL, so it seems like value investors will conclude that META is the superior option right now.
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