AFYA or LOPE: Which Is the Better Value Stock Right Now?
Investors interested in Schools stocks are likely familiar with Afya (AFYA) and Grand Canyon Education (LOPE). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Afya is sporting a Zacks Rank of #1 (Strong 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 AFYA is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
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.
AFYA currently has a forward P/E ratio of 9.84, while LOPE has a forward P/E of 16.15. We also note that AFYA has a PEG ratio of 0.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LOPE currently has a PEG ratio of 1.08.
Another notable valuation metric for AFYA is its P/B ratio of 2.03. 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, LOPE has a P/B of 4.84.
Based on these metrics and many more, AFYA holds a Value grade of B, while LOPE has a Value grade of C.
AFYA is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AFYA is likely the superior value option right now.
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Afya Limited (AFYA) : Free Stock Analysis Report
Grand Canyon Education, Inc. (LOPE) : Free Stock Analysis Report
