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 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.
One stock to keep an eye on is 8x8 (EGHT). EGHT is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A.
EGHT is also sporting a PEG ratio of 0.71. 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. EGHT's PEG compares to its industry's average PEG of 1.10. Over the past 52 weeks, EGHT's PEG has been as high as 0.79 and as low as 0.35, with a median of 0.59.
Another notable valuation metric for EGHT is its P/B ratio of 2.22. 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. EGHT's current P/B looks attractive when compared to its industry's average P/B of 5.31. Over the past year, EGHT's P/B has been as high as 4.01 and as low as 1.70, with a median of 2.31.
These are just a handful of the figures considered in 8x8'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 EGHT is an impressive value stock right now.
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8x8 Inc (EGHT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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