UTI vs. STRA: Which Stock Should Value Investors Buy Now?
Investors interested in Schools stocks are likely familiar with Universal Technical Institute (UTI) and Strategic Education (STRA). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
Currently, Universal Technical Institute has a Zacks Rank of #2 (Buy), while Strategic 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 UTI 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 are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
UTI currently has a forward P/E ratio of 21.46, while STRA has a forward P/E of 24.64. We also note that UTI has a PEG ratio of 1.43. 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 1.64.
Another notable valuation metric for UTI is its P/B ratio of 2.10. 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, STRA has a P/B of 2.80.
Based on these metrics and many more, UTI holds a Value grade of A, while STRA has a Value grade of C.
UTI has seen stronger estimate revision activity and sports more attractive valuation metrics than STRA, so it seems like value investors will conclude that UTI is the superior option right now.
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Universal Technical Institute Inc (UTI) : Free Stock Analysis Report
Strategic Education Inc. (STRA) : Free Stock Analysis Report
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