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Is Perdoceo Education (PRDO) Stock Undervalued 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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Perdoceo Education (PRDO). PRDO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Investors should also note that PRDO holds a PEG ratio of 0.67. 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. PRDO's industry currently sports an average PEG of 1.33. PRDO's PEG has been as high as 1.29 and as low as 0.36, with a median of 0.78, all within the past year.

Another notable valuation metric for PRDO is its P/B ratio of 2.50. 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. This company's current P/B looks solid when compared to its industry's average P/B of 6.71. Over the past year, PRDO's P/B has been as high as 4.10 and as low as 1.30, with a median of 2.87.

Finally, investors will want to recognize that PRDO has a P/CF ratio of 13.80. 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. This stock's P/CF looks attractive against its industry's average P/CF of 35.72. Over the past 52 weeks, PRDO's P/CF has been as high as 25.06 and as low as 7.25, with a median of 16.68.

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


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