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Are Investors Undervaluing Cigna (CI) Right Now?

Zacks Equity Research
ZTO Express (Cayman) Inc. (ZTO) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

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.

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.

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 Cigna (CI). CI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.24, while its industry has an average P/E of 9.39. Over the past year, CI's Forward P/E has been as high as 14.12 and as low as 8.55, with a median of 12.55.

We also note that CI holds a PEG ratio of 0.75. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CI's industry has an average PEG of 1.03 right now. Over the past 52 weeks, CI's PEG has been as high as 1.16 and as low as 0.69, with a median of 1.02.

Another notable valuation metric for CI is its P/B ratio of 1.47. 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. CI's current P/B looks attractive when compared to its industry's average P/B of 1.74. Within the past 52 weeks, CI's P/B has been as high as 3.52 and as low as 1.35, with a median of 2.96.

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. CI has a P/S ratio of 0.77. This compares to its industry's average P/S of 0.99.

These are only a few of the key metrics included in Cigna'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, CI looks like an impressive value stock at the moment.


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