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

Zacks Equity Research
·2 mins read

Investors interested in Schools stocks are likely familiar with Adtalem Global Education (ATGE) and Strategic Education (STRA). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both Adtalem Global Education and Strategic Education have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

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 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.

ATGE currently has a forward P/E ratio of 10.56, while STRA has a forward P/E of 18.32. We also note that ATGE has a PEG ratio of 0.84. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. STRA currently has a PEG ratio of 1.22.

Another notable valuation metric for ATGE is its P/B ratio of 1.11. 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, STRA has a P/B of 2.10.

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

Both ATGE and STRA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ATGE is the superior value option right now.


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Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
 
Strategic Education Inc. (STRA) : Free Stock Analysis Report
 
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