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AFYA or PWSC: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Schools sector might want to consider either Afya (AFYA - Free Report) or PowerSchool Holdings (PWSC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Afya has a Zacks Rank of #2 (Buy), while PowerSchool Holdings has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AFYA has an improving earnings outlook. 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

AFYA currently has a forward P/E ratio of 12.21, while PWSC has a forward P/E of 27.56. We also note that AFYA has a PEG ratio of 0.30. 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. PWSC currently has a PEG ratio of 2.18.

Another notable valuation metric for AFYA is its P/B ratio of 2.39. 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, PWSC has a P/B of 2.73.

Based on these metrics and many more, AFYA holds a Value grade of B, while PWSC has a Value grade of D.

AFYA sticks out from PWSC in both our Zacks Rank and Style Scores models, so value investors will likely feel that AFYA is the better option right now.


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