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ATGE vs. TAL: Which Stock Is the Better Value Option?

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Zacks Equity Research
·2 min read
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Investors interested in stocks from the Schools sector have probably already heard of Adtalem Global Education (ATGE) and TAL Education (TAL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Adtalem Global Education has a Zacks Rank of #2 (Buy), while TAL Education has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ATGE has an improving earnings outlook. 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ATGE currently has a forward P/E ratio of 13.69, while TAL has a forward P/E of 796.73. We also note that ATGE has a PEG ratio of 0.91. 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. TAL currently has a PEG ratio of 24.06.

Another notable valuation metric for ATGE is its P/B ratio of 1.56. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TAL has a P/B of 11.60.

Based on these metrics and many more, ATGE holds a Value grade of B, while TAL has a Value grade of D.

ATGE stands above TAL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ATGE is the superior value option right now.

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Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
TAL Education Group (TAL) : Free Stock Analysis Report
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Zacks Investment Research