HURN vs. IT: Which Stock Is the Better Value Option?

HURN IT

Investors interested in Consulting Services stocks are likely familiar with Huron Consulting (HURN - Free Report) and Gartner (IT - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Huron Consulting is sporting a Zacks Rank of #2 (Buy), while Gartner has a Zacks Rank of #3 (Hold). This means that HURN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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 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.

HURN currently has a forward P/E ratio of 25.31, while IT has a forward P/E of 39.41. We also note that HURN has a PEG ratio of 1.87. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. IT currently has a PEG ratio of 2.60.

Another notable valuation metric for HURN is its P/B ratio of 2.26. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, IT has a P/B of 13.90.

Based on these metrics and many more, HURN holds a Value grade of B, while IT has a Value grade of D.

HURN stands above IT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HURN is the superior value option right now.

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