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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.
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.
GP Strategies has a Zacks Rank of #1 (Strong Buy), while Bright Horizons Family Solutions has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GPX has an improving earnings 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 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 17.05, while BFAM has a forward P/E of 72.55. We also note that GPX has a PEG ratio of 1.14. 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. BFAM currently has a PEG ratio of 12.96.
Another notable valuation metric for GPX is its P/B ratio of 1.25. 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, BFAM has a P/B of 7.82.
Based on these metrics and many more, GPX holds a Value grade of B, while BFAM has a Value grade of D.
GPX stands above BFAM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GPX is the superior value option right now.