Investors looking for stocks in the Schools sector might want to consider either Laureate Education (LAUR) or Strategic Education (STRA). 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.
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.
Right now, Laureate Education is sporting a Zacks Rank of #2 (Buy), while Strategic Education has a Zacks Rank of #4 (Sell). This means that LAUR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
LAUR currently has a forward P/E ratio of 3.08, while STRA has a forward P/E of 19.98. We also note that LAUR has a PEG ratio of 0.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. STRA currently has a PEG ratio of 1.33.
Another notable valuation metric for LAUR is its P/B ratio of 1.12. 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. For comparison, STRA has a P/B of 2.02.
Based on these metrics and many more, LAUR holds a Value grade of B, while STRA has a Value grade of D.
LAUR sticks out from STRA in both our Zacks Rank and Style Scores models, so value investors will likely feel that LAUR is the better option right now.
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Laureate Education Inc. (LAUR) : Free Stock Analysis Report
Strategic Education Inc. (STRA) : Free Stock Analysis Report
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