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Is Career Education (CECO) 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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.

Career Education (CECO - Free Report) is a stock many investors are watching right now. CECO is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.37, which compares to its industry's average of 27.10. Over the past year, CECO's Forward P/E has been as high as 17.94 and as low as 10.25, with a median of 14.22.

Investors will also notice that CECO has a PEG ratio of 0.76. 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. CECO's PEG compares to its industry's average PEG of 1.34. Within the past year, CECO's PEG has been as high as 1.33 and as low as 0.74, with a median of 1.17.

We should also highlight that CECO has a P/B ratio of 2.78. 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 attractive against its industry's average P/B of 6.03. Over the past year, CECO's P/B has been as high as 4.10 and as low as 2.24, with a median of 3.23.

Finally, our model also underscores that CECO has a P/CF ratio of 17. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CECO's current P/CF looks attractive when compared to its industry's average P/CF of 28.76. Over the past 52 weeks, CECO's P/CF has been as high as 164.16 and as low as 12.66, with a median of 19.08.

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


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