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Are Investors Undervaluing Cognizant (CTSH) Right Now?
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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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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 Cognizant (CTSH - Free Report) . CTSH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 14.77, while its industry has an average P/E of 20.44. Over the last 12 months, CTSH's Forward P/E has been as high as 16.26 and as low as 12.23, with a median of 15.23.
We also note that CTSH holds a PEG ratio of 1.46. 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. CTSH's industry currently sports an average PEG of 1.90. Over the last 12 months, CTSH's PEG has been as high as 1.61 and as low as 1.03, with a median of 1.40.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CTSH has a P/S ratio of 2.08. This compares to its industry's average P/S of 2.66.
Finally, our model also underscores that CTSH has a P/CF ratio of 13.36. 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 stock's P/CF looks attractive against its industry's average P/CF of 50.50. Over the past year, CTSH's P/CF has been as high as 23.83 and as low as 12.90, with a median of 16.12.
These are only a few of the key metrics included in Cognizant'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, CTSH looks like an impressive value stock at the moment.
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Are Investors Undervaluing Cognizant (CTSH) 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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 Cognizant (CTSH - Free Report) . CTSH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 14.77, while its industry has an average P/E of 20.44. Over the last 12 months, CTSH's Forward P/E has been as high as 16.26 and as low as 12.23, with a median of 15.23.
We also note that CTSH holds a PEG ratio of 1.46. 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. CTSH's industry currently sports an average PEG of 1.90. Over the last 12 months, CTSH's PEG has been as high as 1.61 and as low as 1.03, with a median of 1.40.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CTSH has a P/S ratio of 2.08. This compares to its industry's average P/S of 2.66.
Finally, our model also underscores that CTSH has a P/CF ratio of 13.36. 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 stock's P/CF looks attractive against its industry's average P/CF of 50.50. Over the past year, CTSH's P/CF has been as high as 23.83 and as low as 12.90, with a median of 16.12.
These are only a few of the key metrics included in Cognizant'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, CTSH looks like an impressive value stock at the moment.