Is Insight Enterprises (NSIT) 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.
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.
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 company to watch right now is Insight Enterprises (NSIT). NSIT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 9.82, while its industry has an average P/E of 12.79. Over the past 52 weeks, NSIT's Forward P/E has been as high as 12.16 and as low as 8.40, with a median of 11.02.
We should also highlight that NSIT has a P/B ratio of 1.64. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. NSIT's current P/B looks attractive when compared to its industry's average P/B of 2.01. Over the past year, NSIT's P/B has been as high as 2.20 and as low as 1.43, with a median of 1.89.
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. NSIT has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.33.
Finally, we should also recognize that NSIT has a P/CF ratio of 8.70. 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. NSIT's current P/CF looks attractive when compared to its industry's average P/CF of 14.08. NSIT's P/CF has been as high as 12.55 and as low as 7.11, with a median of 9.79, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Insight Enterprises is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NSIT feels like a great value stock at the moment.
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