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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 looking for stocks in the Schools sector might want to consider either American Public Education (APEI - Free Report) or 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.
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.
Currently, American Public Education has a Zacks Rank of #2 (Buy), while Bright Horizons Family Solutions has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that APEI is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
APEI currently has a forward P/E ratio of 26.31, while BFAM has a forward P/E of 35.78. We also note that APEI has a PEG ratio of 1.75. 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 3.70.
Another notable valuation metric for APEI is its P/B ratio of 1.26. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BFAM has a P/B of 5.32.
These are just a few of the metrics contributing to APEI's Value grade of A and BFAM's Value grade of D.
APEI 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 APEI is likely the superior value option right now.