ATGE vs. UTI: Which Stock Is the Better Value Option?
Investors interested in stocks from the Schools sector have probably already heard of Adtalem Global Education (ATGE) and Universal Technical Institute (UTI). 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.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Adtalem Global Education has a Zacks Rank of #2 (Buy), while Universal Technical Institute has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ATGE is likely seeing its earnings outlook improve to a greater extent. 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.
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 10.01, while UTI has a forward P/E of 62.44. 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. UTI currently has a PEG ratio of 4.16.
Another notable valuation metric for ATGE is its P/B ratio of 1.29. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, UTI has a P/B of 1.87.
These are just a few of the metrics contributing to ATGE's Value grade of A and UTI's Value grade of C.
ATGE has seen stronger estimate revision activity and sports more attractive valuation metrics than UTI, 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
Universal Technical Institute Inc (UTI) : Free Stock Analysis Report
