Are Investors Undervaluing Perdoceo Education (PRDO) Right Now?

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Perdoceo Education (PRDO). PRDO is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.

We should also highlight that PRDO has a P/B ratio of 2.3. 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. This stock's P/B looks attractive against its industry's average P/B of 3.52. Over the past 12 months, PRDO's P/B has been as high as 2.35 and as low as 1.45, with a median of 1.90.

Finally, we should also recognize that PRDO has a P/CF ratio of 12.58. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. PRDO's current P/CF looks attractive when compared to its industry's average P/CF of 20.32. PRDO's P/CF has been as high as 13.01 and as low as 9.25, with a median of 11.47, all within the past year.

Another great Schools stock you could consider is TAL Education Group (TAL), which is a Zacks Rank of #1 (Strong Buy) stock with a Value Score of A.

Shares of TAL Education Group currently hold a Forward P/E ratio of 21.65, and its PEG ratio is 0.47. In comparison, its industry sports average P/E and PEG ratios of 10.95 and 0.73.

Over the past year, TAL's P/E has been as high as 43.34, as low as 16.46, with a median of 23.04; its PEG ratio has been as high as 0.52, as low as 0.44, with a median of 0.47 during the same time period.

TAL Education Group sports a P/B ratio of 1.90 as well; this compares to its industry's price-to-book ratio of 3.52. In the past 52 weeks, TAL's P/B has been as high as 2.38, as low as 1.22, with a median of 1.78.

These are only a few of the key metrics included in Perdoceo Education and TAL Education Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, PRDO and TAL look like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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