Should You Think About Buying Perdoceo Education Corporation (NASDAQ:PRDO) Now?

Perdoceo Education Corporation (NASDAQ:PRDO), is not the largest company out there, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. As a US$2.2b market-cap stock, it seems odd Perdoceo Education is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Perdoceo Education’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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What's The Opportunity In Perdoceo Education?

Great news for investors – Perdoceo Education is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 14.62x is currently well-below the industry average of 19.9x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Perdoceo Education’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

View our latest analysis for Perdoceo Education

What kind of growth will Perdoceo Education generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 4.3% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Perdoceo Education, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since PRDO is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on PRDO for a while, now might be the time to enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PRDO. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

If you want to dive deeper into Perdoceo Education, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Perdoceo Education has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Perdoceo Education, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.