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CRAI vs. NVEE: Which Stock Is the Better Value Option?

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Investors with an interest in Consulting Services stocks have likely encountered both CRA International (CRAI - Free Report) and NV5 Holdings (NVEE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both CRA International and NV5 Holdings have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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 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.

CRAI currently has a forward P/E ratio of 15.72, while NVEE has a forward P/E of 24.11. We also note that CRAI has a PEG ratio of 1.10. 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. NVEE currently has a PEG ratio of 1.66.

Another notable valuation metric for CRAI is its P/B ratio of 3.10. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NVEE has a P/B of 3.15.

These are just a few of the metrics contributing to CRAI's Value grade of B and NVEE's Value grade of C.

Both CRAI and NVEE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CRAI is the superior value option right now.


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