SNDK vs. NTAP: Which Stock Is the Better Value Option?

Investors with an interest in Computer- Storage Devices stocks have likely encountered both Sandisk Corporation (SNDK) and NetApp (NTAP). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.

Sandisk Corporation and NetApp are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SNDK has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

SNDK currently has a forward P/E ratio of 6.25, while NTAP has a forward P/E of 21.35. We also note that SNDK has a PEG ratio of 0.13. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NTAP currently has a PEG ratio of 2.79.

Another notable valuation metric for SNDK is its P/B ratio of 11.41. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NTAP has a P/B of 27.48.

These metrics, and several others, help SNDK earn a Value grade of B, while NTAP has been given a Value grade of D.

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

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This article originally published on Zacks Investment Research (zacks.com).

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