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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 8x8 (EGHT). EGHT is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
EGHT is also sporting a PEG ratio of 0.71. 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. EGHT's industry has an average PEG of 0.92 right now. Within the past year, EGHT's PEG has been as high as 0.79 and as low as 0.35, with a median of 0.59.
We should also highlight that EGHT has a P/B ratio of 2.22. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.84. Within the past 52 weeks, EGHT's P/B has been as high as 4.01 and as low as 1.70, with a median of 2.31.
Finally, investors should note that EGHT has a P/CF ratio of 5.30. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.16. Over the past year, EGHT's P/CF has been as high as 23.04 and as low as 4.00, with a median of 7.51.
These figures are just a handful of the metrics value investors tend to look at, but they help show that 8x8 is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EGHT feels like a great value stock at the moment.
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
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8x8 Inc (EGHT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).