AFYA vs. LOPE: Which Stock Is the Better Value Option?
Investors looking for stocks in the Schools sector might want to consider either Afya (AFYA) or 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.
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 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.
Afya and Grand Canyon Education are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that AFYA likely has seen a stronger improvement to its earnings outlook than LOPE has recently. 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 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.
AFYA currently has a forward P/E ratio of 11.98, while LOPE has a forward P/E of 16.90. We also note that AFYA has a PEG ratio of 0.54. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LOPE currently has a PEG ratio of 1.13.
Another notable valuation metric for AFYA is its P/B ratio of 2.27. 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 5.07.
These metrics, and several others, help AFYA earn a Value grade of B, while LOPE has been given a Value grade of C.
AFYA sticks out from LOPE in both our Zacks Rank and Style Scores models, so value investors will likely feel that AFYA is the better option right now.
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Afya Limited (AFYA) : Free Stock Analysis Report
Grand Canyon Education, Inc. (LOPE) : Free Stock Analysis Report
