Back to top

Image: Bigstock

Is RTI Surgical (RTIX) Stock Undervalued Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 company to watch right now is RTI Surgical . RTIX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 28.36, which compares to its industry's average of 32.65. Over the last 12 months, RTIX's Forward P/E has been as high as 79.06 and as low as 26.49, with a median of 38.27.

Investors will also notice that RTIX has a PEG ratio of 1.89. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RTIX's PEG compares to its industry's average PEG of 2.37. RTIX's PEG has been as high as 5.27 and as low as 1.77, with a median of 2.55, all within the past year.

Finally, investors will want to recognize that RTIX has a P/CF ratio of 22.19. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. RTIX's current P/CF looks attractive when compared to its industry's average P/CF of 39.65. Over the past year, RTIX's P/CF has been as high as 31.29 and as low as -35.81, with a median of 17.93.

Value investors will likely look at more than just these metrics, but the above data helps show that RTI Surgical is likely undervalued currently. And when considering the strength of its earnings outlook, RTIX sticks out at as one of the market's strongest value stocks.