Should Value Investors Buy Computer Programs and Systems (CPSI) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 value investors might notice is Computer Programs and Systems (CPSI). CPSI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
We should also highlight that CPSI has a P/B ratio of 2.45. 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 stock's P/B looks solid versus its industry's average P/B of 5.11. Over the past year, CPSI's P/B has been as high as 2.52 and as low as 1.90, with a median of 2.19.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CPSI has a P/S ratio of 1.9. This compares to its industry's average P/S of 4.5.
Finally, our model also underscores that CPSI has a P/CF ratio of 15.27. 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 stock's P/CF looks attractive against its industry's average P/CF of 23.32. Over the past year, CPSI's P/CF has been as high as 17.77 and as low as 10.28, with a median of 15.05.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Computer Programs and Systems is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CPSI feels like a great value stock at the moment.
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Computer Programs and Systems, Inc. (CPSI): Free Stock Analysis Report
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