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Are Investors Undervaluing CRA International (CRAI) Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One stock to keep an eye on is CRA International (CRAI). CRAI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.73 right now. For comparison, its industry sports an average P/E of 22.84. Over the past year, CRAI's Forward P/E has been as high as 22.60 and as low as 12.40, with a median of 16.12.

Investors will also notice that CRAI has a PEG ratio of 1.13. 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. CRAI's PEG compares to its industry's average PEG of 2. CRAI's PEG has been as high as 1.19 and as low as 0.78, with a median of 0.94, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CRAI has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.55.

Finally, investors will want to recognize that CRAI has a P/CF ratio of 9.55. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CRAI's P/CF compares to its industry's average P/CF of 15.16. Within the past 12 months, CRAI's P/CF has been as high as 21.53 and as low as 8.32, with a median of 11.25.

These figures are just a handful of the metrics value investors tend to look at, but they help show that CRA International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CRAI feels like a great value stock at the moment.


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