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Is OSI Systems (OSIS) Stock Undervalued Right Now?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is OSI Systems (OSIS - Free Report) . OSIS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 13.92, while its industry has an average P/E of 21.93. Over the past year, OSIS's Forward P/E has been as high as 27.63 and as low as 10.73, with a median of 20.59.

We also note that OSIS holds a PEG ratio of 0.77. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OSIS's PEG compares to its industry's average PEG of 1.82. Within the past year, OSIS's PEG has been as high as 2.21 and as low as 0.71, with a median of 1.65.

Another notable valuation metric for OSIS is its P/B ratio of 2.33. Investors use the P/B ratio to look at a stock's market value versus 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 2.56. Over the past 12 months, OSIS's P/B has been as high as 3.92 and as low as 1.78, with a median of 3.38.

Finally, our model also underscores that OSIS has a P/CF ratio of 9.31. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.13. Over the past year, OSIS's P/CF has been as high as 17.87 and as low as 7.13, with a median of 13.50.

These are just a handful of the figures considered in OSI Systems's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that OSIS is an impressive value stock right now.


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