Core Viewpoint - Investors in the Internet - Software sector should consider 8x8 (EGHT) and Clearwater Analytics (CWAN) as potential value opportunities, with EGHT currently presenting a stronger case for investment [1]. Group 1: Zacks Rank and Earnings Outlook - 8x8 has a Zacks Rank of 2 (Buy), indicating a favorable outlook, while Clearwater Analytics has a Zacks Rank of 3 (Hold), suggesting a less favorable position [3]. - The earnings outlook for 8x8 has likely improved more significantly than that of Clearwater Analytics recently, which is a key consideration for value investors [3]. Group 2: Valuation Metrics - 8x8 has a forward P/E ratio of 6.69, significantly lower than Clearwater Analytics' forward P/E of 31.43, indicating that 8x8 may be undervalued [5]. - The PEG ratio for 8x8 is 0.77, while Clearwater Analytics has a PEG ratio of 1.57, further suggesting that 8x8 offers better value based on expected earnings growth [5]. - 8x8's P/B ratio is 2.22 compared to Clearwater Analytics' P/B of 2.61, reinforcing the notion that 8x8 is more attractively priced relative to its book value [6]. Group 3: Overall Value Grades - Based on various valuation metrics, 8x8 holds a Value grade of A, while Clearwater Analytics has a Value grade of F, indicating a significant disparity in perceived value between the two stocks [6]. - The combination of Zacks Rank and Style Scores suggests that value investors are likely to favor 8x8 over Clearwater Analytics at this time [6].
EGHT or CWAN: Which Is the Better Value Stock Right Now?