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AMRX or PCRX: Which Is the Better Value Stock Right Now?

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Zacks Equity Research
·2 min read
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Investors interested in stocks from the Medical - Drugs sector have probably already heard of Amneal Pharmaceuticals (AMRX) and Pacira (PCRX). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Amneal Pharmaceuticals has a Zacks Rank of #2 (Buy), while Pacira has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AMRX likely has seen a stronger improvement to its earnings outlook than PCRX has recently. However, value investors will care about much more than just this.

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.

AMRX currently has a forward P/E ratio of 6.91, while PCRX has a forward P/E of 21.39. We also note that AMRX has a PEG ratio of 0.28. 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. PCRX currently has a PEG ratio of 0.69.

Another notable valuation metric for AMRX is its P/B ratio of 4.17. 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, PCRX has a P/B of 5.73.

These metrics, and several others, help AMRX earn a Value grade of A, while PCRX has been given a Value grade of C.

AMRX is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AMRX is likely the superior value option right now.


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AMNEAL PHARMACEUTICALS, INC. (AMRX) : Free Stock Analysis Report
 
Pacira BioSciences, Inc. (PCRX) : Free Stock Analysis Report
 
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