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BPI vs. STRA: Which Stock Is the Better Value Option?

Investors looking for stocks in the Schools sector might want to consider either Bridgepoint Education (BPI) or Strategic Education (STRA). 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Bridgepoint Education has a Zacks Rank of #2 (Buy), while Strategic Education has a Zacks Rank of #3 (Hold). This means that BPI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

BPI currently has a forward P/E ratio of 13.75, while STRA has a forward P/E of 27.90. We also note that BPI has a PEG ratio of 1.38. 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. STRA currently has a PEG ratio of 2.79.

Another notable valuation metric for BPI is its P/B ratio of 1.65. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, STRA has a P/B of 6.19.

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

BPI sticks out from STRA in both our Zacks Rank and Style Scores models, so value investors will likely feel that BPI is the better option right now.

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Strategic Education Inc. (STRA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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