Is Cigna (CI) Stock Undervalued Right Now?

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 company value investors might notice is Cigna (CI). CI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also note that CI holds a PEG ratio of 0.83. 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. CI's PEG compares to its industry's average PEG of 1.23. Over the last 12 months, CI's PEG has been as high as 1.04 and as low as 0.60, with a median of 0.87.

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. CI has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.73.

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


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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