Investors interested in Internet - Software stocks are likely familiar with OneSpan (OSPN) and DigitalOcean Holdings, Inc. (DOCN). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
OneSpan and DigitalOcean Holdings, Inc. are both sporting a Zacks Rank of #2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
OSPN currently has a forward P/E ratio of 13.03, while DOCN has a forward P/E of 97.45. We also note that OSPN has a PEG ratio of 1.18. 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. DOCN currently has a PEG ratio of 52.68.
Another notable valuation metric for OSPN is its P/B ratio of 2.21. 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, DOCN has a P/B of 14.55.
These are just a few of the metrics contributing to OSPN's Value grade of A and DOCN's Value grade of F.
Both OSPN and DOCN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that OSPN is the superior value option right now.
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