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PXED vs. UTI: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Schools sector might want to consider either Phoenix Education Partners (PXED - Free Report) or Universal Technical Institute (UTI - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Phoenix Education Partners is sporting a Zacks Rank of #2 (Buy), while Universal Technical Institute has a Zacks Rank of #3 (Hold). This means that PXED's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

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.

PXED currently has a forward P/E ratio of 5.35, while UTI has a forward P/E of 30.24. We also note that PXED has a PEG ratio of 0.43. 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. UTI currently has a PEG ratio of 2.02.

Another notable valuation metric for PXED is its P/B ratio of 2.67. 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, UTI has a P/B of 3.54.

Based on these metrics and many more, PXED holds a Value grade of A, while UTI has a Value grade of C.

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

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