ICLR or GDRX: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Medical Services sector might want to consider either Icon PLC (ICLR) or GoodRx Holdings, Inc. (GDRX). 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Icon PLC is sporting a Zacks Rank of #2 (Buy), while GoodRx Holdings, Inc. has a Zacks Rank of #3 (Hold). This means that ICLR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
ICLR currently has a forward P/E ratio of 19.64, while GDRX has a forward P/E of 30.23. We also note that ICLR has a PEG ratio of 1.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GDRX currently has a PEG ratio of 2.18.
Another notable valuation metric for ICLR is its P/B ratio of 2.34. 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, GDRX has a P/B of 3.60.
These metrics, and several others, help ICLR earn a Value grade of B, while GDRX has been given a Value grade of C.
ICLR 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 ICLR is likely the superior value option right now.
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ICON PLC (ICLR) : Free Stock Analysis Report
GoodRx Holdings, Inc. (GDRX) : Free Stock Analysis Report
