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NICE vs. BL: Which Stock Should Value Investors Buy Now?

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Investors interested in Internet - Software stocks are likely familiar with Nice (NICE - Free Report) and BlackLine (BL - Free Report) . 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Nice and BlackLine are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that NICE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

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.

NICE currently has a forward P/E ratio of 15.25, while BL has a forward P/E of 21.78. We also note that NICE has a PEG ratio of 1.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BL currently has a PEG ratio of 2.75.

Another notable valuation metric for NICE is its P/B ratio of 2.95. 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 10.49.

Based on these metrics and many more, NICE holds a Value grade of B, while BL has a Value grade of D.

NICE sticks out from BL in both our Zacks Rank and Style Scores models, so value investors will likely feel that NICE is the better option right now.


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