Is CVS Health (CVS) Stock Undervalued Right Now?

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is CVS Health (CVS). CVS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.89, which compares to its industry's average of 10.41. Over the past 52 weeks, CVS's Forward P/E has been as high as 10.72 and as low as 7.23, with a median of 8.83.

CVS is also sporting a PEG ratio of 1.41. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CVS's industry has an average PEG of 1.46 right now. CVS's PEG has been as high as 1.63 and as low as 1.01, with a median of 1.37, all within the past year.

Another notable valuation metric for CVS is its P/B ratio of 1.29. 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 stock's P/B looks attractive against its industry's average P/B of 1.49. Over the past 12 months, CVS's P/B has been as high as 1.58 and as low as 1.06, with a median of 1.30.

Finally, we should also recognize that CVS has a P/CF ratio of 7.32. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CVS's P/CF compares to its industry's average P/CF of 8.06. Within the past 12 months, CVS's P/CF has been as high as 9.27 and as low as 6.23, with a median of 7.70.

These are just a handful of the figures considered in CVS Health's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CVS is an impressive value stock right now.

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