HEAR or AUDC: Which Is the Better Value Stock Right Now?

·2 min read

Investors with an interest in Communication - Components stocks have likely encountered both Turtle Beach (HEAR) and AudioCodes (AUDC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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.

Right now, Turtle Beach is sporting a Zacks Rank of #2 (Buy), while AudioCodes has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HEAR is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

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.

HEAR currently has a forward P/E ratio of 18.89, while AUDC has a forward P/E of 20.01. We also note that HEAR has a PEG ratio of 1.18. 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. AUDC currently has a PEG ratio of 1.76.

Another notable valuation metric for HEAR is its P/B ratio of 3.30. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AUDC has a P/B of 4.99.

Based on these metrics and many more, HEAR holds a Value grade of A, while AUDC has a Value grade of C.

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


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Turtle Beach Corporation (HEAR) : Free Stock Analysis Report
 
AudioCodes Ltd. (AUDC) : Free Stock Analysis Report
 
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