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

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Investors with an interest in Computer - Integrated Systems stocks have likely encountered both Hewlett Packard Enterprise (HPE - Free Report) and ZoomInfo (ZI - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Hewlett Packard Enterprise has a Zacks Rank of #2 (Buy), while ZoomInfo has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that HPE has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

HPE currently has a forward P/E ratio of 9.82, while ZI has a forward P/E of 10.50. We also note that HPE has a PEG ratio of 2.25. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ZI currently has a PEG ratio of 3.51.

Another notable valuation metric for HPE is its P/B ratio of 1.12. 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 1.85.

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

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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