Investors looking for stocks in the Medical - Instruments sector might want to consider either Integra LifeSciences (IART) or Abiomed (ABMD). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Integra LifeSciences has a Zacks Rank of #2 (Buy), while Abiomed has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that IART is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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 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.
IART currently has a forward P/E ratio of 23.17, while ABMD has a forward P/E of 60.92. We also note that IART has a PEG ratio of 1.88. 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. ABMD currently has a PEG ratio of 2.18.
Another notable valuation metric for IART is its P/B ratio of 3.87. 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, ABMD has a P/B of 13.12.
These are just a few of the metrics contributing to IART's Value grade of B and ABMD's Value grade of D.
IART sticks out from ABMD in both our Zacks Rank and Style Scores models, so value investors will likely feel that IART is the better option right now.
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Integra LifeSciences Holdings Corporation (IART) : Free Stock Analysis Report
ABIOMED, Inc. (ABMD) : Free Stock Analysis Report
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