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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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VTRU vs. BFAM: Which Stock Is the Better Value Option?
Investors with an interest in Schools stocks have likely encountered both Vitru Limited (VTRU - Free Report) and Bright Horizons Family Solutions (BFAM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Right now, Vitru Limited is sporting a Zacks Rank of #1 (Strong Buy), while Bright Horizons Family Solutions has a Zacks Rank of #3 (Hold). This means that VTRU's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
VTRU currently has a forward P/E ratio of 2.44, while BFAM has a forward P/E of 40.86. We also note that VTRU has a PEG ratio of 0.08. 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 1.99.
Another notable valuation metric for VTRU is its P/B ratio of 1.83. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BFAM has a P/B of 6.91.
These are just a few of the metrics contributing to VTRU's Value grade of B and BFAM's Value grade of D.
VTRU stands above BFAM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VTRU is the superior value option right now.