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Are Investors Undervaluing CRA International (CRAI) 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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

CRA International (CRAI - Free Report) is a stock many investors are watching right now. CRAI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 13.78, which compares to its industry's average of 21.88. Over the past 52 weeks, CRAI's Forward P/E has been as high as 24.36 and as low as 12.40, with a median of 16.41.

CRAI is also sporting a PEG ratio of 1.06. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CRAI's industry currently sports an average PEG of 1.92. Over the past 52 weeks, CRAI's PEG has been as high as 1.19 and as low as 0.78, with a median of 0.86.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CRAI has a P/S ratio of 0.71. This compares to its industry's average P/S of 1.56.

Finally, we should also recognize that CRAI has a P/CF ratio of 8.89. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.33. CRAI's P/CF has been as high as 23.13 and as low as 8.32, with a median of 12.23, all within the past year.

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


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