APEI vs. BFAM: Which Stock Is the Better Value Option?
Investors interested in Schools stocks are likely familiar with American Public Education (APEI) and Bright Horizons Family Solutions (BFAM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, American Public Education has a Zacks Rank of #2 (Buy), while Bright Horizons Family Solutions has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that APEI likely has seen a stronger improvement to its earnings outlook than BFAM has recently. But this is just one factor that value investors are interested in.
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.
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.
APEI currently has a forward P/E ratio of 26.10, while BFAM has a forward P/E of 175.34. We also note that APEI has a PEG ratio of 1.74. 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. BFAM currently has a PEG ratio of 30.02.
Another notable valuation metric for APEI is its P/B ratio of 1.59. 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, BFAM has a P/B of 8.22.
These metrics, and several others, help APEI earn a Value grade of B, while BFAM has been given a Value grade of D.
APEI stands above BFAM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that APEI is the superior value option right now.
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American Public Education, Inc. (APEI) : Free Stock Analysis Report
Bright Horizons Family Solutions Inc. (BFAM) : Free Stock Analysis Report
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