Back to top

Image: Bigstock

CRAI or FC: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Consulting Services sector have probably already heard of CRA International (CRAI - Free Report) and Franklin Covey (FC - 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, CRA International has a Zacks Rank of #2 (Buy), while Franklin Covey has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CRAI likely has seen a stronger improvement to its earnings outlook than FC has recently. But this is just one factor that value investors are interested in.

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.

CRAI currently has a forward P/E ratio of 17.05, while FC has a forward P/E of 53.28. We also note that CRAI has a PEG ratio of 1.20. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FC currently has a PEG ratio of 1.94.

Another notable valuation metric for CRAI is its P/B ratio of 3.15. 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, FC has a P/B of 7.67.

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

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Charles River Associates (CRAI) - free report >>

Franklin Covey Company (FC) - free report >>

Published in