Should Value Investors Buy CRA International (CRAI) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
CRA International (CRAI) is a stock many investors are watching right now. CRAI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.62. This compares to its industry's average Forward P/E of 25.60. Over the last 12 months, CRAI's Forward P/E has been as high as 19.48 and as low as 6.65, with a median of 14.86.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CRAI has a P/S ratio of 0.55. This compares to its industry's average P/S of 1.
Finally, investors will want to recognize that CRAI has a P/CF ratio of 6.27. 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 15.95. Over the past 52 weeks, CRAI's P/CF has been as high as 12.71 and as low as 4.32, with a median of 9.58.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CRA International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CRAI feels like a great value stock at the moment.
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