Are Investors Undervaluing Charles River Associates (CRAI) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Charles River Associates (CRAI). CRAI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 16.48 right now. For comparison, its industry sports an average P/E of 22.64. CRAI's Forward P/E has been as high as 23.16 and as low as 15, with a median of 17.76, all within the past year.

Investors should also note that CRAI holds a PEG ratio of 1.16. 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. CRAI's PEG compares to its industry's average PEG of 2.02. Over the past 52 weeks, CRAI's PEG has been as high as 1.49 and as low as 0.97, with a median of 1.16.

We should also highlight that CRAI has a P/B ratio of 3.16. 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. This company's current P/B looks solid when compared to its industry's average P/B of 5.95. Over the past 12 months, CRAI's P/B has been as high as 4.22 and as low as 2.78, with a median of 3.19.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CRAI has a P/S ratio of 1.16. This compares to its industry's average P/S of 1.76.

Finally, investors should note that CRAI has a P/CF ratio of 9.89. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.27. Over the past 52 weeks, CRAI's P/CF has been as high as 13.35 and as low as 8.70, with a median of 10.27.

Another great Consulting Services stock you could consider is Information Services Group (III), which is a # 2 (Buy) stock with a Value Score of A.

Shares of Information Services Group are currently trading at a forward earnings multiple of 15.29 and a PEG ratio of 0.85 compared to its industry's P/E and PEG ratios of 22.64 and 2.02, respectively.

III's Forward P/E has been as high as 23.58 and as low as 12.15, with a median of 17.43. During the same time period, its PEG ratio has been as high as 1.35, as low as 0.68, with a median of 0.97.

Additionally, Information Services Group has a P/B ratio of 3.46 while its industry's price-to-book ratio sits at 5.95. For III, this valuation metric has been as high as 4.77, as low as 2.73, with a median of 3.46 over the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Charles River Associates and Information Services Group are likely undervalued currently. And when considering the strength of its earnings outlook, CRAI and III sticks out as one of the market's strongest value stocks.

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