INFY vs. WIX: Which Stock Is the Better Value Option?

Investors interested in stocks from the Computers - IT Services sector have probably already heard of Infosys (INFY) and Wix.com (WIX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.

Currently, both Infosys and Wix.com are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

INFY currently has a forward P/E ratio of 23.53, while WIX has a forward P/E of 338.55. We also note that INFY has a PEG ratio of 2.35. 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. WIX currently has a PEG ratio of 6.44.

Another notable valuation metric for INFY is its P/B ratio of 6.09. 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, WIX has a P/B of 73.19.

These metrics, and several others, help INFY earn a Value grade of B, while WIX has been given a Value grade of F.

Both INFY and WIX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that INFY is the superior value option right now.

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