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Are Investors Undervaluing Strategic Education (STRA) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Strategic Education (STRA - Free Report) is a stock many investors are watching right now. STRA is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. STRA has a P/S ratio of 1.4. This compares to its industry's average P/S of 1.43.

Finally, investors will want to recognize that STRA has a P/CF ratio of 12.00. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. STRA's current P/CF looks attractive when compared to its industry's average P/CF of 23.83. Over the past 52 weeks, STRA's P/CF has been as high as 15.87 and as low as 10.81, with a median of 12.87.

Value investors will likely look at more than just these metrics, but the above data helps show that Strategic Education is likely undervalued currently. And when considering the strength of its earnings outlook, STRA sticks out as one of the market's strongest value stocks.

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