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ALXN vs. QGEN: Which Stock Should Value Investors Buy Now?

Zacks Equity Research

Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Alexion Pharmaceuticals (ALXN) and Qiagen (QGEN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Alexion Pharmaceuticals has a Zacks Rank of #2 (Buy), while Qiagen has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that ALXN likely has seen a stronger improvement to its earnings outlook than QGEN 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 10, while QGEN has a forward P/E of 24.12. We also note that ALXN has a PEG ratio of 0.72. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. QGEN currently has a PEG ratio of 2.64.

Another notable valuation metric for ALXN is its P/B ratio of 2.41. 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, QGEN has a P/B of 3.26.

These metrics, and several others, help ALXN earn a Value grade of B, while QGEN has been given a Value grade of C.

ALXN has seen stronger estimate revision activity and sports more attractive valuation metrics than QGEN, so it seems like value investors will conclude that ALXN is the superior option right now.


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Alexion Pharmaceuticals, Inc. (ALXN) : Free Stock Analysis Report
 
QIAGEN N.V. (QGEN) : Free Stock Analysis Report
 
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Zacks Investment Research