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 companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, CRA International has a Zacks Rank of #2 (Buy), while Accenture has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CRAI likely has seen a stronger improvement to its earnings outlook than ACN 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.
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 19.55, while ACN has a forward P/E of 26.54. We also note that CRAI has a PEG ratio of 1.50. 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 2.79.
Another notable valuation metric for CRAI is its P/B ratio of 3.69. 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 7.85.
These are just a few of the metrics contributing to CRAI's Value grade of B and ACN's Value grade of C.
CRAI has seen stronger estimate revision activity and sports more attractive valuation metrics than ACN, so it seems like value investors will conclude that CRAI is the superior option right now.
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Charles River Associates (CRAI) : Free Stock Analysis Report
Accenture PLC (ACN) : Free Stock Analysis Report
