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PRDO vs. LOPE: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Schools sector have probably already heard of Perdoceo Education (PRDO - Free Report) and Grand Canyon Education (LOPE - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Perdoceo Education has a Zacks Rank of #2 (Buy), while Grand Canyon Education has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PRDO likely has seen a stronger improvement to its earnings outlook than LOPE has recently. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

PRDO currently has a forward P/E ratio of 8.10, while LOPE has a forward P/E of 13.56. We also note that PRDO has a PEG ratio of 0.54. 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. LOPE currently has a PEG ratio of 0.90.

Another notable valuation metric for PRDO is its P/B ratio of 1.92. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, LOPE has a P/B of 2.52.

These metrics, and several others, help PRDO earn a Value grade of B, while LOPE has been given a Value grade of C.

PRDO sticks out from LOPE in both our Zacks Rank and Style Scores models, so value investors will likely feel that PRDO is the better option right now.


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Grand Canyon Education, Inc. (LOPE) - free report >>

Perdoceo Education Corporation (PRDO) - free report >>

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