Is Credit Suisse (CS) Stock Undervalued Right Now?

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Credit Suisse (CS). CS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.63. This compares to its industry's average Forward P/E of 10.65. CS's Forward P/E has been as high as 11.40 and as low as 7.51, with a median of 8.71, all within the past year.

Another valuation metric that we should highlight is CS's P/B ratio of 0.78. The P/B ratio is used to compare a stock's market value with 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 1.38. Within the past 52 weeks, CS's P/B has been as high as 0.80 and as low as 0.62, with a median of 0.70.

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. CS has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.68.

Finally, we should also recognize that CS has a P/CF ratio of 7.88. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.74. CS's P/CF has been as high as 11.48 and as low as 7.23, with a median of 9.15, all within the past year.

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

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