Investors interested in Schools stocks are likely familiar with Perdoceo Education (PRDO) and Lincoln Educational Services Corporation (LINC). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Both Perdoceo Education and Lincoln Educational Services Corporation have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
PRDO currently has a forward P/E ratio of 12.43, while LINC has a forward P/E of 29.78. We also note that PRDO has a PEG ratio of 0.83. 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. LINC currently has a PEG ratio of 1.99.
Another notable valuation metric for PRDO is its P/B ratio of 2.09. 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, LINC has a P/B of 3.81.
Based on these metrics and many more, PRDO holds a Value grade of A, while LINC has a Value grade of C.
Both PRDO and LINC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PRDO is the superior value option right now.
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Perdoceo Education Corporation (PRDO): Free Stock Analysis Report Lincoln Educational Services Corporation (LINC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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