Investors with an interest in Internet - Software stocks have likely encountered both 8x8 (EGHT) and Smartsheet (SMAR). 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Right now, both 8x8 and Smartsheet are sporting a Zacks Rank of # 1 (Strong Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

EGHT currently has a forward P/E ratio of 7.97, while SMAR has a forward P/E of 39.30. We also note that EGHT has a PEG ratio of 0.68. 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. SMAR currently has a PEG ratio of 1.25.

Another notable valuation metric for EGHT is its P/B ratio of 3.12. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SMAR has a P/B of 11.06.

These are just a few of the metrics contributing to EGHT's Value grade of B and SMAR's Value grade of F.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

8x8 Inc (EGHT) : Free Stock Analysis Report

Smartsheet (SMAR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research