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IART vs. ABMD: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
Circor (CIR) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Integra LifeSciences has a Zacks Rank of #2 (Buy), while Abiomed has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IART has an improving earnings outlook. However, value investors will care about much more than just this.

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.

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.

IART currently has a forward P/E ratio of 18.96, while ABMD has a forward P/E of 56.87. We also note that IART has a PEG ratio of 1.48. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ABMD currently has a PEG ratio of 2.03.

Another notable valuation metric for IART is its P/B ratio of 3.13. 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, ABMD has a P/B of 12.33.

Based on these metrics and many more, IART holds a Value grade of B, while ABMD has a Value grade of D.

IART 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 IART is likely the superior value 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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