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PRDO vs. PWSC: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Schools sector have probably already heard of Perdoceo Education (PRDO - Free Report) and PowerSchool Holdings, Inc. (PWSC - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Perdoceo Education is sporting a Zacks Rank of #2 (Buy), while PowerSchool Holdings, Inc. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PRDO is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PRDO currently has a forward P/E ratio of 6.08, while PWSC has a forward P/E of 148.52. We also note that PRDO has a PEG ratio of 0.41. 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. PWSC currently has a PEG ratio of 17.51.

Another notable valuation metric for PRDO is its P/B ratio of 1.07. 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, PWSC has a P/B of 2.30.

Based on these metrics and many more, PRDO holds a Value grade of A, while PWSC has a Value grade of D.

PRDO sticks out from PWSC 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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Perdoceo Education Corporation (PRDO) - free report >>

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