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

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Zacks Equity Research
·2 min read
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Investors with an interest in Schools stocks have likely encountered both Adtalem Global Education (ATGE) and TAL Education (TAL). 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Adtalem Global Education and TAL Education are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. 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 factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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 13.19, while TAL has a forward P/E of 704.91. We also note that ATGE has a PEG ratio of 0.88. 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. TAL currently has a PEG ratio of 21.28.

Another notable valuation metric for ATGE is its P/B ratio of 1.50. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TAL has a P/B of 10.26.

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