We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are Investors Undervaluing Chegg (CHGG) Right Now?
Read MoreHide Full Article
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Chegg (CHGG - Free Report) . CHGG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CHGG has a P/S ratio of 1.08. This compares to its industry's average P/S of 3.11.
Finally, we should also recognize that CHGG has a P/CF ratio of 5.84. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.27. Over the past 52 weeks, CHGG's P/CF has been as high as 8.73 and as low as 2.93, with a median of 6.
If you're looking for another solid Internet - Software value stock, take a look at Rimini Street (RMNI - Free Report) . RMNI is a # 2 (Buy) stock with a Value score of A.
Rimini Street is trading at a forward earnings multiple of 6.02 at the moment, with a PEG ratio of 0.95. This compares to its industry's average P/E of 36.15 and average PEG ratio of 1.79.
Rimini Street also has a P/B ratio of -6.92 compared to its industry's price-to-book ratio of 3.23. Over the past year, its P/B ratio has been as high as -3.08, as low as -7.74, with a median of -5.35.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Chegg and Rimini Street are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHGG and RMNI feels like a great value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are Investors Undervaluing Chegg (CHGG) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Chegg (CHGG - Free Report) . CHGG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CHGG has a P/S ratio of 1.08. This compares to its industry's average P/S of 3.11.
Finally, we should also recognize that CHGG has a P/CF ratio of 5.84. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.27. Over the past 52 weeks, CHGG's P/CF has been as high as 8.73 and as low as 2.93, with a median of 6.
If you're looking for another solid Internet - Software value stock, take a look at Rimini Street (RMNI - Free Report) . RMNI is a # 2 (Buy) stock with a Value score of A.
Rimini Street is trading at a forward earnings multiple of 6.02 at the moment, with a PEG ratio of 0.95. This compares to its industry's average P/E of 36.15 and average PEG ratio of 1.79.
Rimini Street also has a P/B ratio of -6.92 compared to its industry's price-to-book ratio of 3.23. Over the past year, its P/B ratio has been as high as -3.08, as low as -7.74, with a median of -5.35.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Chegg and Rimini Street are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHGG and RMNI feels like a great value stock at the moment.