Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Diversified Consumer Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Diversified Consumer Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued Diversified Consumer Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Diversified Consumer Services industry for Tuesday, November 19, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Diversified Consumer Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

European Wax Center, Inc.’s Value Grade

Value Grade:

European Wax Center, Inc. operates as the franchisor and operator of out-of-home waxing services in the United States. It offers body and facial waxing services; and pre- and post-service products, including ingrown hair serums, exfoliating gels, brow shapers, and skin treatments. The company was founded in 2004 and is headquartered in Plano, Texas.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

European Wax Center, Inc. has a Value Score of 67, which is considered to be undervalued.

When you look at European Wax Center, Inc.’s price-to-sales ratio at 1.19 compared to the industry median at 1.06, this company has a higher price relative to revenue compared to its peers. This could make European Wax Center, Inc.’s stock less attractive for value investors.

European Wax Center, Inc.’s price-earnings ratio is 23.90 compared to the industry median at 20.10. This means it has a higher share price relative to earnings compared to its peers. This could make European Wax Center, Inc. less attractive for value investors.

Now, let’s assess European Wax Center, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 13.3, when compared to the industry median of 10.9, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. European Wax Center, Inc.’s shareholder yield is higher than its industry median ratio of (0.15%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. European Wax Center, Inc.’s price-to-book ratio is higher than its industry median ratio of 1.51. This could make European Wax Center, Inc. less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at European Wax Center, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. European Wax Center, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 17.60. This could make European Wax Center, Inc. more attractive because the lower P/FCF ratio indicates that European Wax Center, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Four Seasons Education (Cayman) Inc.’s Value Grade

Value Grade:

Four Seasons Education (Cayman) Inc. provides after-school education services for kindergarten, elementary, and middle school students in the People’s Republic of China and internationally. It also offers consulting services; and tourism services, including travel agency services. The company was founded in 2007 and is headquartered in Shanghai, the People’s Republic of China.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Four Seasons Education (Cayman) Inc. has a Value Score of 71, which is considered to be undervalued.

Four Seasons Education (Cayman) Inc.’s price-earnings ratio is 37.7 compared to the industry median at 20.1. This means that it has a higher price relative to its earnings compared to its peers. This makes Four Seasons Education (Cayman) Inc. less attractive for value investors.

Four Seasons Education (Cayman) Inc.’s price-to-book ratio is higher than its peers. This could make Four Seasons Education (Cayman) Inc. less attractive for value investors when compared to the industry median at 1.51.

You can read more about Four Seasons Education (Cayman) Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Legacy Education Inc.’s Value Grade

Value Grade:

Legacy Education Inc. provides education services to students, high school graduates, and working parents in the United States. The company offers a range of certificate or degree programs, including ultrasound technician (UT), vocational nursing (VN), VN Associate of Applied Science degree, Associate degree of nursing, nursing assistant, magnetic resonance imaging (MRI) Associate of Applied Science, cardiac sonography, pharmacy technician, dental assisting, clinical medical assisting, medical administrative assisting, medical billing and coding, and veterinary assistant. It also provides a range of certificate or degree programs, such as phlebotomy technician avocational, nursing assistant avocational, UT Associate of Applied Science degree, business administrative specialist, computer specialist, accounting, medical administrative assistant, medical assisting, veterinary technology Associate of Applied Science, avocational phlebotomy technician program, registered nurse to Bachelor of Science in nursing, and diagnostic medical sonography program. The company operates under the High Desert Medical College, Central Coast College, and Integrity College of Health academic institutions. Legacy Education Inc. was incorporated in 2020 and is based in Temecula, California.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Legacy Education Inc. has a Value Score of 67, which is considered to be undervalued.

Legacy Education Inc.’s price-earnings ratio is 10.2 compared to the industry median at 20.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Legacy Education Inc. more attractive for value investors.

Legacy Education Inc.’s price-to-book ratio is lower than its peers. This could make Legacy Education Inc. more attractive for value investors when compared to the industry median at 1.51.

You can read more about Legacy Education Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

QuantaSing Group Limited’s Value Grade

Value Grade:

QuantaSing Group Limited provides online learning services in the People’s Republic of China. It operates through two segments, Learning Service and Others; and Consumer Business. The company offers online courses in the field of financial literacy; skills upgrading comprising short-video production courses; and recreation and leisure that include personal well-being, standing meditation, and calligraphy courses; as well as electronic keyboard courses. It also offers marketing and enterprise talent management services to enterprise customers. In addition, the company provides online and literacy courses to adult learners under various brands, including QiNiu, JiangZhen, and QianChi. The company provides courses to individual users through mobile and other online channels. QuantaSing Group Limited was founded in 2019 and is headquartered in Beijing, the People’s Republic of China.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

QuantaSing Group Limited has a Value Score of 100, which is considered to be undervalued.

QuantaSing Group Limited’s price-earnings ratio is 3.0 compared to the industry median at 20.1. This means that it has a lower price relative to its earnings compared to its peers. This makes QuantaSing Group Limited more attractive for value investors.

QuantaSing Group Limited’s price-to-book ratio is higher than its peers. This could make QuantaSing Group Limited less attractive for value investors when compared to the industry median at 1.51.

You can read more about QuantaSing Group Limited’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

TCTM Kids IT Education Inc.’s Value Grade

Value Grade:

TCTM Kids IT Education Inc., through its subsidiaries, engages in the provision of IT-focused education services in Mainland China. It offers supplementary science, technology, engineering, and mathematics (STEM) education programs to young children aged between three and eighteen through online teaching models and instructors from online or offline learning centers. The company also operates an education platform that offers distance instruction, classroom-based learning, and online learning modules. In addition, it operates 61it.cn, an online platform to facilitate the live instruction of STEM education courses; and Tongcheng Online App. The company was formerly known as Tarena International, Inc. and changed its name to TCTM Kids IT Education Inc. in February 2024. TCTM Kids IT Education Inc. was founded in 2002 and is headquartered in Beijing, the People’s Republic of China.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

TCTM Kids IT Education Inc. has a Value Score of 94, which is considered to be undervalued.

TCTM Kids IT Education Inc.’s price-earnings ratio is 5.1 compared to the industry median at 20.1. This means that it has a lower price relative to its earnings compared to its peers. This makes TCTM Kids IT Education Inc. more attractive for value investors.

You can read more about TCTM Kids IT Education Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Wah Fu Education Group Limited’s Value Grade

Value Grade:

Wah Fu Education Group Limited, through its subsidiaries, provides online exam preparation services and related technology solutions in the People’s Republic of China. It operates through Online Education Services; and Technological Development and Operation Service segments. The Online Education Services segment offers online education platforms to institutions, such as universities and training institutions, and online course development service companies. This segment provides self-study examination, continuing education, and non-diploma training platforms that allow students to enroll in courses for college credit; vocational education 1+X and higher vocational enrollment expansion teaching and educational administration platform; Huafu e-school system and paperless examination platform; and online training and examination preparation services directly to students. The Technological Development and Operation Services segment develops and maintains online education platforms and online courses for its clients, including universities and government agencies, as well as private clients, such as publishers; and offers consulting, maintenance, and updating services related to online education programs. In addition, the company produces online training course materials. The company was founded in 1999 and is headquartered in Beijing, the People’s Republic of China.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Wah Fu Education Group Limited has a Value Score of 89, which is considered to be undervalued.

Wah Fu Education Group Limited’s price-to-book ratio is higher than its peers. This could make Wah Fu Education Group Limited less attractive for value investors when compared to the industry median at 1.51.

You can read more about Wah Fu Education Group Limited’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Diversified Consumer Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Diversified Consumer Services stocks as well as other industrys.

Choosing Which of the 6 Best Diversified Consumer Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• European Wax Center, Inc. stock has a Value Grade of B.
• Four Seasons Education (Cayman) Inc. stock has a Value Grade of B.
• Legacy Education Inc. stock has a Value Grade of B.
• QuantaSing Group Limited stock has a Value Grade of A.
• TCTM Kids IT Education Inc. stock has a Value Grade of A.
• Wah Fu Education Group Limited stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 undervalued stocks in the Diversified Consumer Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Diversified Consumer Services Stocks

Want to learn more about Diversified Consumer Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued Diversified Consumer Services Stocks for Tuesday, November 19
• 5 Undervalued Diversified Consumer Services Stocks for Monday, November 18
• 4 Undervalued Diversified Consumer Services Stocks for Friday, November 15
• 3 Undervalued Diversified Consumer Services Stocks for Thursday, November 14

AAII Disclaimer

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