CRAI or HURN: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Consulting Services sector might want to consider either CRA International (CRAI) or Huron Consulting (HURN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both CRA International and Huron Consulting are holding a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
CRAI currently has a forward P/E ratio of 16.52, while HURN has a forward P/E of 25.79. We also note that CRAI has a PEG ratio of 1.27. 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. HURN currently has a PEG ratio of 1.91.
Another notable valuation metric for CRAI is its P/B ratio of 2.01. 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, HURN has a P/B of 2.60.
These metrics, and several others, help CRAI earn a Value grade of B, while HURN has been given a Value grade of C.
Both CRAI and HURN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CRAI is the superior value option right now.
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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.