Back to top

Image: Bigstock

ATGE or BFAM: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Schools stocks are likely familiar with Adtalem Global Education (ATGE - Free Report) and Bright Horizons Family Solutions (BFAM - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Currently, Adtalem Global Education has a Zacks Rank of #2 (Buy), while Bright Horizons Family Solutions has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ATGE 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

ATGE currently has a forward P/E ratio of 8.57, while BFAM has a forward P/E of 65.01. We also note that ATGE has a PEG ratio of 0.57. 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. BFAM currently has a PEG ratio of 2.71.

Another notable valuation metric for ATGE is its P/B ratio of 1.42. 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, BFAM has a P/B of 6.81.

These metrics, and several others, help ATGE earn a Value grade of A, while BFAM has been given a Value grade of C.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Bright Horizons Family Solutions Inc. (BFAM) - free report >>

Adtalem Global Education Inc. (ATGE) - free report >>

Published in