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PRDO or LOPE: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Schools sector might want to consider either Perdoceo Education (PRDO - Free Report) or 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.

Perdoceo Education has a Zacks Rank of #1 (Strong Buy), while Grand Canyon Education has a Zacks Rank of #3 (Hold) right now. This means that PRDO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PRDO currently has a forward P/E ratio of 10.42, while LOPE has a forward P/E of 18.15. We also note that PRDO has a PEG ratio of 0.69. 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. LOPE currently has a PEG ratio of 1.21.

Another notable valuation metric for PRDO is its P/B ratio of 2.44. 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, LOPE has a P/B of 3.17.

These are just a few of the metrics contributing to PRDO's Value grade of A and LOPE's Value grade of C.

PRDO stands above LOPE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PRDO is the superior value option right now.


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