CRAI or ACN: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Consulting Services sector have probably already heard of CRA International (CRAI) and Accenture (ACN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, CRA International has a Zacks Rank of #2 (Buy), while Accenture has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CRAI is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CRAI currently has a forward P/E ratio of 18.79, while ACN has a forward P/E of 25.66. We also note that CRAI has a PEG ratio of 1.45. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ACN currently has a PEG ratio of 2.89.
Another notable valuation metric for CRAI is its P/B ratio of 3.56. 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, ACN has a P/B of 8.08.
Based on these metrics and many more, CRAI holds a Value grade of B, while ACN has a Value grade of D.
CRAI 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 CRAI is likely the superior value option right now.
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Charles River Associates (CRAI) : Free Stock Analysis Report
Accenture PLC (ACN) : Free Stock Analysis Report
