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IFNNY vs. NVMI: Which Stock Is the Better Value Option?

Zacks Equity Research
·2-min read

Investors interested in Electronics - Semiconductors stocks are likely familiar with Infineon Technologies AG (IFNNY) and Nova Ltd. (NVMI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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

Currently, Infineon Technologies AG has a Zacks Rank of #2 (Buy), while Nova Ltd. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IFNNY has an improving earnings outlook. But this is only part of the picture for value investors.

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.

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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.

IFNNY currently has a forward P/E ratio of 14.75, while NVMI has a forward P/E of 17.16. We also note that IFNNY has a PEG ratio of 1.34. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NVMI currently has a PEG ratio of 3.71.

Another notable valuation metric for IFNNY is its P/B ratio of 2.99. 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, NVMI has a P/B of 4.47.

Based on these metrics and many more, IFNNY holds a Value grade of B, while NVMI has a Value grade of C.

IFNNY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that IFNNY is likely the superior value option right now.


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Infineon Technologies AG (IFNNY) : Free Stock Analysis Report
 
Nova Ltd. (NVMI) : Free Stock Analysis Report
 
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Zacks Investment Research