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HOLX vs. EW: Which Stock Is the Better Value Option?

Zacks Equity Research
MongoDB (MDB) closed the most recent trading day at $162.93, moving +1.33% from the previous trading session.

Investors looking for stocks in the Medical - Instruments sector might want to consider either Hologic (HOLX) or Edwards Lifesciences (EW). But which of these two companies is the best option for those looking for undervalued stocks? 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, Hologic has a Zacks Rank of #2 (Buy), while Edwards Lifesciences has a Zacks Rank of #3 (Hold). This means that HOLX'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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

HOLX currently has a forward P/E ratio of 18.54, while EW has a forward P/E of 32.81. We also note that HOLX has a PEG ratio of 2.07. 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. EW currently has a PEG ratio of 2.22.

Another notable valuation metric for HOLX is its P/B ratio of 5.57. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, EW has a P/B of 10.47.

These metrics, and several others, help HOLX earn a Value grade of B, while EW has been given a Value grade of D.

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


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Hologic, Inc. (HOLX) : Free Stock Analysis Report
 
Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report
 
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