ELV or GDRX: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Medical Services sector might want to consider either Elevance Health (ELV) or GoodRx Holdings, Inc. (GDRX). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Elevance Health and GoodRx Holdings, Inc. are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
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.
ELV currently has a forward P/E ratio of 13.86, while GDRX has a forward P/E of 16.88. We also note that ELV has a PEG ratio of 1.15. 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. GDRX currently has a PEG ratio of 2.13.
Another notable valuation metric for ELV is its P/B ratio of 3.07. 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, GDRX has a P/B of 3.49.
These metrics, and several others, help ELV earn a Value grade of A, while GDRX has been given a Value grade of C.
Both ELV and GDRX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ELV is the superior value option right now.
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Elevance Health, Inc. (ELV) : Free Stock Analysis Report
GoodRx Holdings, Inc. (GDRX) : Free Stock Analysis Report
