ATGE vs. BFAM: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Schools sector might want to consider either Adtalem Global Education (ATGE) or 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Adtalem Global Education has a Zacks Rank of #1 (Strong Buy), while Bright Horizons Family Solutions has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that ATGE 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 try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ATGE currently has a forward P/E ratio of 10.10, while BFAM has a forward P/E of 29.09. We also note that ATGE has a PEG ratio of 0.67. 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. BFAM currently has a PEG ratio of 2.65.
Another notable valuation metric for ATGE is its P/B ratio of 1.30. 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 3.96.
These metrics, and several others, help ATGE earn a Value grade of B, while BFAM has been given a Value grade of F.
ATGE sticks out from BFAM in both our Zacks Rank and Style Scores models, so value investors will likely feel that ATGE is the better option right now.
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Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
Bright Horizons Family Solutions Inc. (BFAM) : Free Stock Analysis Report
