Is CDW (CDW) Stock Undervalued Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

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.

CDW (CDW) is a stock many investors are watching right now. CDW is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 15.79, which compares to its industry's average of 18.04. CDW's Forward P/E has been as high as 21.48 and as low as 14.64, with a median of 17.95, all within the past year.

Another notable valuation metric for CDW is its P/B ratio of 8.61. 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. This company's current P/B looks solid when compared to its industry's average P/B of 18.52. Over the past 12 months, CDW's P/B has been as high as 14.04 and as low as 8.20, with a median of 9.98.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CDW has a P/S ratio of 0.76. This compares to its industry's average P/S of 1.63.

Value investors will likely look at more than just these metrics, but the above data helps show that CDW is likely undervalued currently. And when considering the strength of its earnings outlook, CDW sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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