ATGE or LOPE: Which Is the Better Value Stock Right Now?
Investors with an interest in Schools stocks have likely encountered both Adtalem Global Education (ATGE) 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, Adtalem Global Education is sporting a Zacks Rank of #2 (Buy), while Grand Canyon Education has a Zacks Rank of #3 (Hold). This means that ATGE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
ATGE currently has a forward P/E ratio of 10.12, while LOPE has a forward P/E of 17.51. We also note that ATGE has a PEG ratio of 0.67. 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. LOPE currently has a PEG ratio of 1.17.
Another notable valuation metric for ATGE is its P/B ratio of 1.30. 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 5.57.
These metrics, and several others, help ATGE earn a Value grade of A, while LOPE has been given a Value grade of C.
ATGE has seen stronger estimate revision activity and sports more attractive valuation metrics than LOPE, so it seems like value investors will conclude that ATGE is the superior option right now.
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Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
Grand Canyon Education, Inc. (LOPE) : Free Stock Analysis Report
