Should Value Investors Buy Stride (LRN) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Stride (LRN). LRN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 15.64 right now. For comparison, its industry sports an average P/E of 18.67. LRN's Forward P/E has been as high as 16.33 and as low as 12.10, with a median of 13.72, all within the past year.
We also note that LRN holds a PEG ratio of 0.78. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LRN's PEG compares to its industry's average PEG of 1.05. LRN's PEG has been as high as 0.82 and as low as 0.61, with a median of 0.69, all within the past year.
We should also highlight that LRN has a P/B ratio of 2.97. 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. LRN's current P/B looks attractive when compared to its industry's average P/B of 3.29. Over the past 12 months, LRN's P/B has been as high as 3.08 and as low as 1.97, with a median of 2.60.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Stride is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LRN feels like a great value stock at the moment.
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Stride, Inc. (LRN) : Free Stock Analysis Report