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

Published 12/01/2020, 11:40 PM
Updated 07/09/2023, 06:31 AM

Investors looking for stocks in the Schools sector might want to consider either American Public Education (NASDAQ:APEI) or Bright Horizons Family Solutions (NYSE:BFAM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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, American Public Education has a Zacks Rank of #2 (Buy), while Bright Horizons Family Solutions has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that APEI likely has seen a stronger improvement to its earnings outlook than BFAM has recently. But this is just one piece of the puzzle for value investors.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

APEI currently has a forward P/E ratio of 25.33, while BFAM has a forward P/E of 177.92. We also note that APEI has a PEG ratio of 1.69. 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. BFAM currently has a PEG ratio of 30.47.

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Another notable valuation metric for APEI is its P/B ratio of 1.55. 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 8.34.

These metrics, and several others, help APEI earn a Value grade of B, while BFAM has been given a Value grade of D.

APEI has seen stronger estimate revision activity and sports more attractive valuation metrics than BFAM, so it seems like value investors will conclude that APEI is the superior option right now.


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American Public Education, Inc. (APEI): Free Stock Analysis Report

Bright Horizons Family Solutions Inc. (BFAM): Free Stock Analysis Report

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