Is There Now An Opportunity In Consensus Cloud Solutions, Inc. (NASDAQ:CCSI)?

Explore Consensus Cloud Solutions's Fair Values from the Community and select yours

Consensus Cloud Solutions, Inc. (NASDAQ:CCSI), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Consensus Cloud Solutions’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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What Is Consensus Cloud Solutions Worth?

Good news, investors! Consensus Cloud Solutions is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Consensus Cloud Solutions’s ratio of 5.74x is below its peer average of 38.11x, which indicates the stock is trading at a lower price compared to the Software industry. However, given that Consensus Cloud Solutions’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Check out our latest analysis for Consensus Cloud Solutions

What kind of growth will Consensus Cloud Solutions generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Consensus Cloud Solutions, it is expected to deliver a relatively unexciting earnings growth of 8.3%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Consensus Cloud Solutions, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since CCSI is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on CCSI for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CCSI. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

If you'd like to know more about Consensus Cloud Solutions as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for Consensus Cloud Solutions you should know about.

If you are no longer interested in Consensus Cloud Solutions, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.