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Bright Horizons Family Solutions Inc. (BFAM) - free report >>
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Bright Horizons Family Solutions Inc. (BFAM) - free report >>
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GPX vs. BFAM: Which Stock Is the Better Value Option?
Investors interested in Schools stocks are likely familiar with GP Strategies and Bright Horizons Family Solutions (BFAM - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
GP Strategies has a Zacks Rank of #2 (Buy), while Bright Horizons Family Solutions has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that GPX likely has seen a stronger improvement to its earnings outlook than BFAM has recently. But this is only part of the picture 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 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.
GPX currently has a forward P/E ratio of 19.87, while BFAM has a forward P/E of 71.23. We also note that GPX has a PEG ratio of 1.32. 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. BFAM currently has a PEG ratio of 12.72.
Another notable valuation metric for GPX is its P/B ratio of 1.28. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BFAM has a P/B of 7.68.
These metrics, and several others, help GPX earn a Value grade of A, while BFAM has been given a Value grade of F.
GPX has seen stronger estimate revision activity and sports more attractive valuation metrics than BFAM, so it seems like value investors will conclude that GPX is the superior option right now.