Are Investors Undervaluing Adtalem Global Education (ATGE) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Adtalem Global Education (ATGE) is a stock many investors are watching right now. ATGE is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.02. This compares to its industry's average Forward P/E of 21.34. ATGE's Forward P/E has been as high as 10.56 and as low as 7.90, with a median of 9.28, all within the past year.
We also note that ATGE holds a PEG ratio of 0.67. 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. ATGE's industry has an average PEG of 1.28 right now. ATGE's PEG has been as high as 0.70 and as low as 0.53, with a median of 0.62, all within the past year.
We should also highlight that ATGE has a P/B ratio of 1.33. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.79. Over the past 12 months, ATGE's P/B has been as high as 1.36 and as low as 0.98, with a median of 1.16.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ATGE has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.38.
Perdoceo Education (PRDO) may be another strong Schools stock to add to your shortlist. PRDO is a # 1 (Strong Buy) stock with a Value grade of A.
Shares of Perdoceo Education are currently trading at a forward earnings multiple of 8.51 and a PEG ratio of 0.57 compared to its industry's P/E and PEG ratios of 21.34 and 1.28, respectively.
Over the last 12 months, PRDO's P/E has been as high as 11, as low as 6.46, with a median of 7.72, and its PEG ratio has been as high as 0.73, as low as 0.43, with a median of 0.51.
Furthermore, Perdoceo Education holds a P/B ratio of 1.42 and its industry's price-to-book ratio is 2.79. PRDO's P/B has been as high as 1.48, as low as 0.97, with a median of 1.20 over the past 12 months.
These are just a handful of the figures considered in Adtalem Global Education and Perdoceo Education's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ATGE and PRDO is an impressive value stock right now.
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Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
Perdoceo Education Corporation (PRDO) : Free Stock Analysis Report
