EXEL vs. TECH: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Exelixis (EXEL) and Techne (TECH). 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 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 Techne are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EXEL has an improving earnings outlook. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
EXEL currently has a forward P/E ratio of 21.54, while TECH has a forward P/E of 35.41. We also note that EXEL has a PEG ratio of 1.04. 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. TECH currently has a PEG ratio of 3.37.
Another notable valuation metric for EXEL is its P/B ratio of 2.71. 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, TECH has a P/B of 5.55.
Based on these metrics and many more, EXEL holds a Value grade of B, while TECH has a Value grade of D.
EXEL 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 EXEL is likely the superior value option right now.
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Exelixis, Inc. (EXEL) : Free Stock Analysis Report
Bio-Techne Corp (TECH) : Free Stock Analysis Report
