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CRAI or IT: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Consulting Services sector have probably already heard of CRA International (CRAI) and Gartner (IT). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, CRA International has a Zacks Rank of #2 (Buy), while Gartner 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 CRAI has an improving earnings 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.

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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.

CRAI currently has a forward P/E ratio of 28.51, while IT has a forward P/E of 38.99. We also note that CRAI has a PEG ratio of 1.78. 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. IT currently has a PEG ratio of 3.61.

Another notable valuation metric for CRAI is its P/B ratio of 5.57. 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, IT has a P/B of 48.67.

These are just a few of the metrics contributing to CRAI's Value grade of B and IT's Value grade of D.

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

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Gartner, Inc. (IT) : Free Stock Analysis Report

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