Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Alexion Pharmaceuticals (ALXN) and Alkermes (ALKS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Alexion Pharmaceuticals has a Zacks Rank of #2 (Buy), while Alkermes has a Zacks Rank of #3 (Hold). 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ALXN currently has a forward P/E ratio of 13.53, while ALKS has a forward P/E of 74.48. We also note that ALXN has a PEG ratio of 0.92. 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. ALKS currently has a PEG ratio of 3.22.
Another notable valuation metric for ALXN is its P/B ratio of 2.97. 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 3.62.
These are just a few of the metrics contributing to ALXN's Value grade of B and ALKS's 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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