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HPE vs. ZI: Which Stock Is the Better Value Option?

HPE vs. ZI: Which Stock Is the Better Value Option?

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This story originally appeared on Zacks

Investors interested in stocks from the Computer - Integrated Systems sector have probably already heard of Hewlett Packard Enterprise (HPE) and ZoomInfo (ZI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

- Zacks

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Hewlett Packard Enterprise has a Zacks Rank of #1 (Strong Buy), while ZoomInfo has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that HPE likely has seen a stronger improvement to its earnings outlook than ZI has recently. But this is just one piece of the puzzle for value investors.

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.

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.

HPE currently has a forward P/E ratio of 7.61, while ZI has a forward P/E of 125.70. We also note that HPE has a PEG ratio of 1.32. 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. ZI currently has a PEG ratio of 3.21.

Another notable valuation metric for HPE is its P/B ratio of 1.01. 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, ZI has a P/B of 13.79.

These are just a few of the metrics contributing to HPE's Value grade of A and ZI's Value grade of F.

HPE stands above ZI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HPE is the superior value option right now.



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Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report

 

ZoomInfo Technologies Inc. (ZI): Free Stock Analysis Report

 

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