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HURN or IT: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Consulting Services sector have probably already heard of Huron Consulting (HURN - Free Report) and Gartner (IT - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.

Right now, Huron Consulting is sporting a Zacks Rank of #1 (Strong Buy), while Gartner has a Zacks Rank of #4 (Sell). This means that HURN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

HURN currently has a forward P/E ratio of 23.81, while IT has a forward P/E of 35.34. We also note that HURN has a PEG ratio of 1.76. 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. IT currently has a PEG ratio of 2.61.

Another notable valuation metric for HURN is its P/B ratio of 2.36. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, IT has a P/B of 12.63.

These metrics, and several others, help HURN earn a Value grade of B, while IT has been given a Value grade of D.

HURN 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 HURN is likely the superior value option right now.


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