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CRAI vs. EFX: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Consulting Services sector have probably already heard of CRA International (CRAI - Free Report) and Equifax (EFX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

CRA International and Equifax are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CRAI likely has seen a stronger improvement to its earnings outlook than EFX has recently. But this is only part of the picture for value investors.

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 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 21.16, while EFX has a forward P/E of 31.59. We also note that CRAI has a PEG ratio of 1.32. 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. EFX currently has a PEG ratio of 2.88.

Another notable valuation metric for CRAI is its P/B ratio of 5.69. 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, EFX has a P/B of 5.8.

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

CRAI has seen stronger estimate revision activity and sports more attractive valuation metrics than EFX, so it seems like value investors will conclude that CRAI is the superior option right now.


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