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Is CECO Environmental (CECE) Stock Undervalued Right Now?

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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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is CECO Environmental . CECE is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CECE has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.91.

Finally, investors should note that CECE has a P/CF ratio of 5.58. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.36. Over the past 52 weeks, CECE's P/CF has been as high as 188.97 and as low as 4.46, with a median of 12.61.

These are only a few of the key metrics included in CECO Environmental's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CECE looks like an impressive value stock at the moment.

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