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Investors looking for stocks in the Communication - Components sector might want to consider either AudioCodes (AUDC) or Arista Networks (ANET). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both AudioCodes and Arista Networks are holding a Zacks Rank of # 2 (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. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

AUDC currently has a forward P/E ratio of 11.73, while ANET has a forward P/E of 39.27. We also note that AUDC has a PEG ratio of 0.47. 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. ANET currently has a PEG ratio of 2.25.

Another notable valuation metric for AUDC is its P/B ratio of 2.13. 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, ANET has a P/B of 12.53.

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

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.