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ATGE vs. BFAM: Which Stock Is the Better Value Option?

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Investors interested in Schools stocks are likely familiar with Adtalem Global Education (ATGE - Free Report) 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Currently, Adtalem Global Education has a Zacks Rank of #1 (Strong Buy), while Bright Horizons Family Solutions has a Zacks Rank of #4 (Sell). This means that ATGE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ATGE currently has a forward P/E ratio of 9, while BFAM has a forward P/E of 65.16. We also note that ATGE has a PEG ratio of 0.60. 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 2.71.

Another notable valuation metric for ATGE is its P/B ratio of 1.49. 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 6.83.

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

ATGE has seen stronger estimate revision activity and sports more attractive valuation metrics than BFAM, so it seems like value investors will conclude that ATGE is the superior option right now.


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Bright Horizons Family Solutions Inc. (BFAM) - free report >>

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