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 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 Ringcentral (RNG). RNG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. RNG has a P/S ratio of 0.97. This compares to its industry's average P/S of 1.6.
Finally, investors should note that RNG has a P/CF ratio of 7.47. 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. RNG's P/CF compares to its industry's average P/CF of 18.40. RNG's P/CF has been as high as 15.51 and as low as 7.21, with a median of 11.30, all within the past year.
These are only a few of the key metrics included in Ringcentral'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, RNG looks like an impressive value stock at the moment.
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Ringcentral, Inc. (RNG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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