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Investors with an interest in Internet - Software stocks have likely encountered both Paypal (PYPL) and Adyen N.V. Unsponsored ADR (ADYEY). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Paypal has a Zacks Rank of #2 (Buy), while Adyen N.V. Unsponsored ADR has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PYPL has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

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.

PYPL currently has a forward P/E ratio of 15.45, while ADYEY has a forward P/E of 43.16. We also note that PYPL has a PEG ratio of 1.27. 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. ADYEY currently has a PEG ratio of 1.82.

Another notable valuation metric for PYPL is its P/B ratio of 3.75. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ADYEY has a P/B of 12.88.

These metrics, and several others, help PYPL earn a Value grade of A, while ADYEY has been given a Value grade of F.

PYPL has seen stronger estimate revision activity and sports more attractive valuation metrics than ADYEY, so it seems like value investors will conclude that PYPL is the superior option right now.

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