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American Public Education, Inc. (APEI) - free report >>
Bright Horizons Family Solutions Inc. (BFAM) - free report >>
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American Public Education, Inc. (APEI) - free report >>
Bright Horizons Family Solutions Inc. (BFAM) - free report >>
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APEI vs. BFAM: Which Stock Is the Better Value Option?
Investors interested in Schools stocks are likely familiar with American Public Education (APEI - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, American Public Education has a Zacks Rank of #1 (Strong Buy), while Bright Horizons Family Solutions has a Zacks Rank of #3 (Hold). This means that APEI'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 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.
APEI currently has a forward P/E ratio of 21.27, while BFAM has a forward P/E of 31.42. We also note that APEI has a PEG ratio of 1.42. 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 3.25.
Another notable valuation metric for APEI is its P/B ratio of 0.85. 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 4.88.
Based on these metrics and many more, APEI holds a Value grade of A, while BFAM has a Value grade of D.
APEI has seen stronger estimate revision activity and sports more attractive valuation metrics than BFAM, so it seems like value investors will conclude that APEI is the superior option right now.