Back to top

Image: Bigstock

Are Investors Undervaluing CSG Systems International (CSGS) Right Now?

Read MoreHide Full Article

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

CSG Systems International (CSGS - Free Report) is a stock many investors are watching right now. CSGS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 13.89. This compares to its industry's average Forward P/E of 18.15. Over the past year, CSGS's Forward P/E has been as high as 14.17 and as low as 9.56, with a median of 11.07.

CSGS is also sporting a PEG ratio of 1.39. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CSGS's PEG compares to its industry's average PEG of 1.66. Over the last 12 months, CSGS's PEG has been as high as 1.91 and as low as 0.96, with a median of 1.11.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CSGS has a P/S ratio of 1.54. This compares to its industry's average P/S of 2.52.

Finally, our model also underscores that CSGS has a P/CF ratio of 11.52. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. CSGS's P/CF compares to its industry's average P/CF of 14.12. Within the past 12 months, CSGS's P/CF has been as high as 11.64 and as low as 8.36, with a median of 9.93.

These are just a handful of the figures considered in CSG Systems International'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 CSGS is an impressive value stock right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


CSG Systems International, Inc. (CSGS) - free report >>

Published in