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CECO or LOPE: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors interested in Schools stocks are likely familiar with Career Education (CECO) and Grand Canyon Education (LOPE). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Career Education and Grand Canyon Education are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CECO likely has seen a stronger improvement to its earnings outlook than LOPE has recently. But this is only part of the picture for value investors.

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.

CECO currently has a forward P/E ratio of 16.79, while LOPE has a forward P/E of 24.22. We also note that CECO has a PEG ratio of 1.34. 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. LOPE currently has a PEG ratio of 1.51.

Another notable valuation metric for CECO is its P/B ratio of 3.60. 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, LOPE has a P/B of 4.81.

These metrics, and several others, help CECO earn a Value grade of B, while LOPE has been given a Value grade of C.

CECO is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CECO is likely the superior value option right now.


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Career Education Corporation (CECO) : Free Stock Analysis Report
 
Grand Canyon Education, Inc. (LOPE) : Free Stock Analysis Report
 
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