Is Charles River Associates (CRAI) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Charles River Associates (CRAI) is a stock many investors are watching right now. CRAI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 15.50. This compares to its industry's average Forward P/E of 23.33. CRAI's Forward P/E has been as high as 23.16 and as low as 15.50, with a median of 18.60, all within the past year.
Investors will also notice that CRAI has a PEG ratio of 1. 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. CRAI's industry currently sports an average PEG of 2.08. CRAI's PEG has been as high as 1.73 and as low as 1, with a median of 1.20, all within the past year.
Investors should also recognize that CRAI has a P/B ratio of 2.87. 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. This stock's P/B looks attractive against its industry's average P/B of 4.84. Within the past 52 weeks, CRAI's P/B has been as high as 4.22 and as low as 2.78, with a median of 3.20.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CRAI has a P/S ratio of 1.03. This compares to its industry's average P/S of 1.69.
Finally, our model also underscores that CRAI has a P/CF ratio of 8.97. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.01. CRAI's P/CF has been as high as 13.33 and as low as 8.93, with a median of 10.76, all within the past year.
Investors could also keep in mind Stantec (STN), an Consulting Services stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Stantec sports a P/B ratio of 3.04 as well; this compares to its industry's price-to-book ratio of 4.84. In the past 52 weeks, STN's P/B has been as high as 3.98, as low as 3.04, with a median of 3.46.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Charles River Associates and Stantec are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CRAI and STN feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Charles River Associates (CRAI) : Free Stock Analysis Report
Stantec Inc. (STN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
