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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the “Value” category. Stocks with high Zacks Ranks and “A” grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Ringcentral (RNG). RNG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.45, which compares to its industry’s average of 19.51. Over the last 12 months, RNG’s Forward P/E has been as high as 10.63 and as low as 6.94, with a median of 8.83.
Investors should also note that RNG holds a PEG ratio of 0.42. 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. RNG’s PEG compares to its industry’s average PEG of 0.92. Within the past year, RNG’s PEG has been as high as 0.48 and as low as 0.24, with a median of 0.34.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RNG has a P/S ratio of 1.33. This compares to its industry’s average P/S of 2.41.
Finally, we should also recognize that RNG has a P/CF ratio of 12.31. 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. RNG’s current P/CF looks attractive when compared to its industry’s average P/CF of 13.63. Over the past year, RNG’s P/CF has been as high as 16.16 and as low as -126.77, with a median of 11.79.
These are just a handful of the figures considered in Ringcentral’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 RNG is an impressive value stock right now.
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Ringcentral, Inc. (RNG) : Free Stock Analysis Report
