Should Value Investors Buy CRA International (CRAI) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 company to watch right now is CRA International (CRAI). CRAI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 13.82. This compares to its industry's average Forward P/E of 25.79. Over the last 12 months, CRAI's Forward P/E has been as high as 19.48 and as low as 12.40, with a median of 15.41.
Investors will also notice that CRAI has a PEG ratio of 1.06. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CRAI's PEG compares to its industry's average PEG of 2.30. Within the past year, CRAI's PEG has been as high as 1.38 and as low as 0.78, with a median of 1.14.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 0.81. This compares to its industry's average P/S of 1.45.
Finally, we should also recognize that CRAI has a P/CF ratio of 8.91. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. CRAI's current P/CF looks attractive when compared to its industry's average P/CF of 15.95. CRAI's P/CF has been as high as 13.51 and as low as 8.03, with a median of 9.86, all within the past year.
These are only a few of the key metrics included in CRA International's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CRAI looks like an impressive value stock at the moment.
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