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COLL or NBIX: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2 min read

Investors looking for stocks in the Medical - Drugs sector might want to consider either Collegium Pharmaceutical (COLL) or Neurocrine Biosciences (NBIX). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Collegium Pharmaceutical and Neurocrine Biosciences are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that COLL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

COLL currently has a forward P/E ratio of 6.43, while NBIX has a forward P/E of 25.53. We also note that COLL has a PEG ratio of 0.32. 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. NBIX currently has a PEG ratio of 1.06.

Another notable valuation metric for COLL is its P/B ratio of 6.45. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NBIX has a P/B of 13.05.

These are just a few of the metrics contributing to COLL's Value grade of A and NBIX's Value grade of C.

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


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Collegium Pharmaceutical, Inc. (COLL) : Free Stock Analysis Report
 
Neurocrine Biosciences, Inc. (NBIX) : Free Stock Analysis Report
 
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Zacks Investment Research