ICLR vs. GDRX: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Medical Services sector have probably already heard of Icon PLC (ICLR) and GoodRx Holdings, Inc. (GDRX). 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.
Icon PLC and GoodRx Holdings, Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that ICLR likely has seen a stronger improvement to its earnings outlook than GDRX has recently. But this is only part of the picture 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ICLR currently has a forward P/E ratio of 20.65, while GDRX has a forward P/E of 25.31. We also note that ICLR has a PEG ratio of 1.42. 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. GDRX currently has a PEG ratio of 1.95.
Another notable valuation metric for ICLR is its P/B ratio of 2.45. 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, GDRX has a P/B of 2.90.
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
