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Is Cirrus Logic (CRUS) Stock Undervalued Right Now?

Zacks Equity Research
In the latest trading session, Arconic (ARNC) closed at $25.13, marking a -0.2% move from the previous day.

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Cirrus Logic (CRUS). CRUS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Another notable valuation metric for CRUS is its P/B ratio of 2.04. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.92. Over the past 12 months, CRUS's P/B has been as high as 2.59 and as low as 1.64, with a median of 2.10.

Finally, investors will want to recognize that CRUS has a P/CF ratio of 13.55. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CRUS's P/CF compares to its industry's average P/CF of 15.94. Within the past 12 months, CRUS's P/CF has been as high as 17.22 and as low as 9.67, with a median of 12.66.

These are only a few of the key metrics included in Cirrus Logic's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CRUS looks like an impressive value stock at the moment.


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