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Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Alexion Pharmaceuticals (ALXN) and BioMarin Pharmaceutical (BMRN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Alexion Pharmaceuticals has a Zacks Rank of #2 (Buy), while BioMarin Pharmaceutical has a Zacks Rank of #3 (Hold) right now. This means that ALXN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ALXN currently has a forward P/E ratio of 12.51, while BMRN has a forward P/E of 54.44. We also note that ALXN has a PEG ratio of 0.70. 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. BMRN currently has a PEG ratio of 1.35.
Another notable valuation metric for ALXN is its P/B ratio of 3.16. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BMRN has a P/B of 3.94.
Based on these metrics and many more, ALXN holds a Value grade of B, while BMRN has a Value grade of D.
ALXN stands above BMRN 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
BioMarin Pharmaceutical Inc. (BMRN) : Free Stock Analysis Report
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