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Are Investors Undervaluing Changyou.Com (CYOU) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Changyou.Com . CYOU is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.31 right now. For comparison, its industry sports an average P/E of 15.98. Over the past year, CYOU's Forward P/E has been as high as 14.56 and as low as 7.30, with a median of 8.86.

Investors will also notice that CYOU has a PEG ratio of 0.75. 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. CYOU's PEG compares to its industry's average PEG of 1.38. CYOU's PEG has been as high as 0.94 and as low as 0.72, with a median of 0.85, all within the past year.

Finally, investors will want to recognize that CYOU has a P/CF ratio of 10.94. 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 14.02. CYOU's P/CF has been as high as 19.06 and as low as 9.74, with a median of 12.18, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Changyou.Com is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CYOU feels like a great value stock at the moment.