Back to top

Image: Bigstock

Are Investors Undervaluing CSG Systems International (CSGS) Right Now?

Read MoreHide Full Article

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

CSG Systems International (CSGS - Free Report) is a stock many investors are watching right now. CSGS is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.22, which compares to its industry's average of 18.93. Over the past year, CSGS's Forward P/E has been as high as 14.93 and as low as 9.56, with a median of 12.83.

We also note that CSGS holds a PEG ratio of 1.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CSGS's industry currently sports an average PEG of 1.77. CSGS's PEG has been as high as 2.13 and as low as 0.96, with a median of 1.34, all within the past year.

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. CSGS has a P/S ratio of 1.19. This compares to its industry's average P/S of 1.85.

Finally, we should also recognize that CSGS has a P/CF ratio of 9.85. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CSGS's P/CF compares to its industry's average P/CF of 13.94. Within the past 12 months, CSGS's P/CF has been as high as 12.26 and as low as 8.36, with a median of 10.67.

These are just a handful of the figures considered in CSG Systems International'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 CSGS is an impressive value stock right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


CSG Systems International, Inc. (CSGS) - free report >>

Published in