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Is CRA International (CRAI) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is CRA International (CRAI - Free Report) . CRAI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 19.48, while its industry has an average P/E of 22.85. Over the past year, CRAI's Forward P/E has been as high as 26.52 and as low as 15.73, with a median of 22.68.

Another valuation metric that we should highlight is CRAI's P/B ratio of 2.17. 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. This stock's P/B looks solid versus its industry's average P/B of 6.17. CRAI's P/B has been as high as 2.38 and as low as 1.64, with a median of 2.09, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CRAI has a P/S ratio of 1.01. This compares to its industry's average P/S of 1.36.

Finally, investors will want to recognize that CRAI has a P/CF ratio of 13.78. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CRAI's P/CF compares to its industry's average P/CF of 15.90. Within the past 12 months, CRAI's P/CF has been as high as 26.80 and as low as 10.52, with a median of 18.13.

These are only a few of the key metrics included in CRA International's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CRAI looks like an impressive value stock at the moment.


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