EXEL vs. ILMN: Which Stock Is the Better Value Option?
Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Exelixis (EXEL) or Illumina (ILMN). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Exelixis and Illumina are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that EXEL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
EXEL currently has a forward P/E ratio of 23.10, while ILMN has a forward P/E of 202.05. We also note that EXEL has a PEG ratio of 1.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ILMN currently has a PEG ratio of 9.10.
Another notable valuation metric for EXEL is its P/B ratio of 2.86. 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, ILMN has a P/B of 4.06.
These are just a few of the metrics contributing to EXEL's Value grade of B and ILMN's Value grade of D.
EXEL sticks out from ILMN in both our Zacks Rank and Style Scores models, so value investors will likely feel that EXEL is the better option right now.
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Exelixis, Inc. (EXEL) : Free Stock Analysis Report
Illumina, Inc. (ILMN) : Free Stock Analysis Report
