Investors interested in stocks from the Consulting Services sector have probably already heard of CRA International (CRAI - Free Report) and Accenture (ACN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
CRA International has a Zacks Rank of #1 (Strong Buy), while Accenture has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CRAI is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
CRAI currently has a forward P/E ratio of 19.23, while ACN has a forward P/E of 24.19. We also note that CRAI has a PEG ratio of 1.48. 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. ACN currently has a PEG ratio of 2.34.
Another notable valuation metric for CRAI is its P/B ratio of 1.99. 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, ACN has a P/B of 8.40.
These are just a few of the metrics contributing to CRAI's Value grade of A and ACN's Value grade of D.
CRAI sticks out from ACN in both our Zacks Rank and Style Scores models, so value investors will likely feel that CRAI is the better option right now.