LGND or GMAB: Which Is the Better Value Stock Right Now?
Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Ligand Pharmaceuticals (LGND) and Genmab AS Sponsored ADR (GMAB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Both Ligand Pharmaceuticals and Genmab AS Sponsored ADR have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
LGND currently has a forward P/E ratio of 18.13, while GMAB has a forward P/E of 35.60. We also note that LGND has a PEG ratio of 0.73. 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. GMAB currently has a PEG ratio of 1.28.
Another notable valuation metric for LGND is its P/B ratio of 1.34. 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, GMAB has a P/B of 8.55.
These are just a few of the metrics contributing to LGND's Value grade of A and GMAB's Value grade of C.
Both LGND and GMAB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LGND is the superior value option right now.
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Ligand Pharmaceuticals Incorporated (LGND) : Free Stock Analysis Report
Genmab AS Sponsored ADR (GMAB) : Free Stock Analysis Report
