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Is Comtech Telecommunications (CMTL) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.

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 stock to keep an eye on is Comtech Telecommunications (CMTL - Free Report) . CMTL is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 15.07, which compares to its industry's average of 24.10. Over the past 52 weeks, CMTL's Forward P/E has been as high as 33.72 and as low as 12.81, with a median of 21.63.

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. CMTL has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.3.

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


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