PRDO or LOPE: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Schools sector might want to consider either Perdoceo Education (PRDO) or Grand Canyon Education (LOPE). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Perdoceo Education has a Zacks Rank of #1 (Strong Buy), while Grand Canyon Education has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PRDO has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
PRDO currently has a forward P/E ratio of 7.57, while LOPE has a forward P/E of 16.97. We also note that PRDO has a PEG ratio of 0.50. 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. LOPE currently has a PEG ratio of 1.13.
Another notable valuation metric for PRDO is its P/B ratio of 1.22. 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. By comparison, LOPE has a P/B of 5.30.
These are just a few of the metrics contributing to PRDO's Value grade of A and LOPE's Value grade of C.
PRDO has seen stronger estimate revision activity and sports more attractive valuation metrics than LOPE, so it seems like value investors will conclude that PRDO is the superior option right now.
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Perdoceo Education Corporation (PRDO) : Free Stock Analysis Report
Grand Canyon Education, Inc. (LOPE) : Free Stock Analysis Report
