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Is RadNet (RDNT) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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 RadNet (RDNT - Free Report) . RDNT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another notable valuation metric for RDNT is its P/B ratio of 3.66. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.20. Within the past 52 weeks, RDNT's P/B has been as high as 5.61 and as low as 2.45, with a median of 3.35.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. RDNT has a P/S ratio of 0.72. This compares to its industry's average P/S of 0.98.
These are only a few of the key metrics included in RadNet'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, RDNT looks like an impressive value stock at the moment.