ALXN or ALKS: Which Is the Better Value Stock Right Now?
Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Alexion Pharmaceuticals (ALXN) and Alkermes (ALKS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Alexion Pharmaceuticals is sporting a Zacks Rank of #1 (Strong Buy), while Alkermes has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that ALXN likely has seen a stronger improvement to its earnings outlook than ALKS has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ALXN currently has a forward P/E ratio of 12.92, while ALKS has a forward P/E of 68.19. We also note that ALXN has a PEG ratio of 0.83. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ALKS currently has a PEG ratio of 2.95.
Another notable valuation metric for ALXN is its P/B ratio of 2.84. 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. By comparison, ALKS has a P/B of 3.33.
These metrics, and several others, help ALXN earn a Value grade of B, while ALKS has been given a Value grade of D.
ALXN stands above ALKS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ALXN is the superior value option right now.
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Alexion Pharmaceuticals, Inc. (ALXN) : Free Stock Analysis Report
Alkermes plc (ALKS) : Free Stock Analysis Report
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