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CRAI vs. HCKT: Which Stock Is the Better Value Option?

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Investors interested in Consulting Services stocks are likely familiar with CRA International (CRAI) and Hackett Group (HCKT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, CRA International has a Zacks Rank of #2 (Buy), while Hackett Group 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 HCKT has recently. 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.

CRAI currently has a forward P/E ratio of 15.58, while HCKT has a forward P/E of 25.43. We also note that CRAI has a PEG ratio of 1.20. 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. HCKT currently has a PEG ratio of 1.88.

Another notable valuation metric for CRAI is its P/B ratio of 1.77. 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, HCKT has a P/B of 3.22.

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

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
 
The Hackett Group, Inc. (HCKT) : Free Stock Analysis Report
 
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