Is CommScope (COMM) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is CommScope (COMM). COMM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.83 right now. For comparison, its industry sports an average P/E of 23.95. COMM's Forward P/E has been as high as 15.22 and as low as 6.99, with a median of 11.40, all within the past year.
Investors should also note that COMM holds a PEG ratio of 2.21. 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. COMM's industry has an average PEG of 4.87 right now. COMM's PEG has been as high as 3.04 and as low as 0.86, with a median of 1.45, all within the past year.
Investors should also recognize that COMM has a P/B ratio of 2.28. 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 3.62. COMM's P/B has been as high as 4.65 and as low as 1.65, with a median of 3.21, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. COMM has a P/S ratio of 0.9. This compares to its industry's average P/S of 0.92.
Finally, investors will want to recognize that COMM has a P/CF ratio of 8.07. 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 9.34. Over the past year, COMM's P/CF has been as high as 14.30 and as low as 5.04, with a median of 9.95.
Value investors will likely look at more than just these metrics, but the above data helps show that CommScope is likely undervalued currently. And when considering the strength of its earnings outlook, COMM sticks out at as one of the market's strongest value stocks.
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