MD or DOCS: Which Is the Better Value Stock Right Now?
Investors with an interest in Medical Services stocks have likely encountered both Pediatrix Medical Group (MD) and Doximity (DOCS). But which of these two stocks presents investors with the better value opportunity right now? 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 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.
Right now, Pediatrix Medical Group is sporting a Zacks Rank of #2 (Buy), while Doximity has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MD has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
MD currently has a forward P/E ratio of 8.39, while DOCS has a forward P/E of 27.03. We also note that MD has a PEG ratio of 1.84. 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. DOCS currently has a PEG ratio of 2.62.
Another notable valuation metric for MD is its P/B ratio of 1.14. 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, DOCS has a P/B of 4.16.
These metrics, and several others, help MD earn a Value grade of A, while DOCS has been given a Value grade of D.
MD 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 MD is likely the superior value option right now.
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Pediatrix Medical Group, Inc. (MD) : Free Stock Analysis Report
Doximity, Inc. (DOCS) : Free Stock Analysis Report
