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Should Value Investors Buy CSG Systems International (CSGS) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

CSG Systems International (CSGS - Free Report) is a stock many investors are watching right now. CSGS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 13.43, while its industry has an average P/E of 17.57. Over the past 52 weeks, CSGS's Forward P/E has been as high as 17.04 and as low as 11.60, with a median of 13.81.

Investors will also notice that CSGS has a PEG ratio of 1.34. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CSGS's PEG compares to its industry's average PEG of 1.53. Over the last 12 months, CSGS's PEG has been as high as 2.16 and as low as 1.34, with a median of 1.92.

Finally, our model also underscores that CSGS has a P/CF ratio of 11.26. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.87. CSGS's P/CF has been as high as 15.49 and as low as 9.72, with a median of 11.45, all within the past year.

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


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