PRDO vs. LOPE: Which Stock Is the Better Value Option?
Investors interested in stocks from the Schools sector have probably already heard of Perdoceo Education (PRDO) and Grand Canyon Education (LOPE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Perdoceo Education is sporting a Zacks Rank of #1 (Strong Buy), while Grand Canyon Education has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PRDO is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
PRDO currently has a forward P/E ratio of 8.70, while LOPE has a forward P/E of 17.40. We also note that PRDO has a PEG ratio of 0.58. 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 1.16.
Another notable valuation metric for PRDO is its P/B ratio of 1.41. 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, LOPE has a P/B of 5.58.
Based on these metrics and many more, PRDO holds a Value grade of A, while LOPE has a Value grade of C.
PRDO is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PRDO is likely the superior value option right now.
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Perdoceo Education Corporation (PRDO) : Free Stock Analysis Report
Grand Canyon Education, Inc. (LOPE) : Free Stock Analysis Report
