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ATGE vs. BFAM: Which Stock Should Value Investors Buy Now?

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·2 min read
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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 offers value investors a better bang for their buck right now? We'll need to take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Adtalem Global 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 ATGE likely has seen a stronger improvement to its earnings outlook than BFAM has recently. 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 13.38, while BFAM has a forward P/E of 53.90. We also note that ATGE has a PEG ratio of 0.89. 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 9.23.

Another notable valuation metric for ATGE is its P/B ratio of 1.53. 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 7.49.

These are just a few of the metrics contributing to ATGE's Value grade of A and BFAM's Value grade of D.

ATGE has seen stronger estimate revision activity and sports more attractive valuation metrics than BFAM, 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
 
Bright Horizons Family Solutions Inc. (BFAM) : Free Stock Analysis Report
 
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