Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors looking for stocks in the Consulting Services sector might want to consider either CRA International (CRAI - Free Report) or 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, CRA International has a Zacks Rank of #2 (Buy), while Franklin Covey has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CRAI has an improving earnings outlook. But this is just one piece of the puzzle 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.

CRAI currently has a forward P/E ratio of 16.85, while FC has a forward P/E of 38.02. We also note that CRAI has a PEG ratio of 1.18. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FC currently has a PEG ratio of 1.38.

Another notable valuation metric for CRAI is its P/B ratio of 3.32. 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 9.02.

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

CRAI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CRAI is likely 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