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GPX vs. BFAM: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Schools sector have probably already heard of GP Strategies (GPX) and Bright Horizons Family Solutions (BFAM). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

GP Strategies and Bright Horizons Family Solutions are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that GPX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.

GPX currently has a forward P/E ratio of 92.80, while BFAM has a forward P/E of 175.32. We also note that GPX has a PEG ratio of 6.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BFAM currently has a PEG ratio of 30.02.

Another notable valuation metric for GPX is its P/B ratio of 0.95. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BFAM has a P/B of 8.22.

These metrics, and several others, help GPX earn a Value grade of B, while BFAM has been given a Value grade of D.

GPX 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 GPX is likely the superior value option right now.


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GP Strategies Corporation (GPX) : Free Stock Analysis Report
 
Bright Horizons Family Solutions Inc. (BFAM) : Free Stock Analysis Report
 
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Zacks Investment Research