Investors looking for stocks in the Schools sector might want to consider either Perdoceo Education (PRDO) or Grand Canyon Education (LOPE). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Perdoceo Education is sporting a Zacks Rank of #2 (Buy), while Grand Canyon Education has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PRDO is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
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.
PRDO currently has a forward P/E ratio of 10.69, while LOPE has a forward P/E of 19.71. We also note that PRDO has a PEG ratio of 0.71. 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. LOPE currently has a PEG ratio of 1.31.
Another notable valuation metric for PRDO is its P/B ratio of 1.76. 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, LOPE has a P/B of 6.33.
These are just a few of the metrics contributing to PRDO's Value grade of A and LOPE's Value grade of C.
PRDO sticks out from LOPE in both our Zacks Rank and Style Scores models, so value investors will likely feel that PRDO is the better option right now.
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Perdoceo Education Corporation (PRDO): Free Stock Analysis Report Grand Canyon Education, Inc. (LOPE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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