PRDO vs. UTI: Which Stock Is the Better Value Option?
Investors with an interest in Schools stocks have likely encountered both Perdoceo Education (PRDO) and Universal Technical Institute (UTI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Perdoceo Education is sporting a Zacks Rank of #2 (Buy), while Universal Technical Institute has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PRDO has an improving earnings outlook. But this is only part of the picture 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.
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.
PRDO currently has a forward P/E ratio of 11.46, while UTI has a forward P/E of 48.35. We also note that PRDO has a PEG ratio of 0.76. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UTI currently has a PEG ratio of 3.22.
Another notable valuation metric for PRDO is its P/B ratio of 2.23. 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, UTI has a P/B of 5.95.
These are just a few of the metrics contributing to PRDO's Value grade of B and UTI's Value grade of D.
PRDO sticks out from UTI in both our Zacks Rank and Style Scores models, so value investors will likely feel that PRDO is the better option right now.
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