MMSI vs. ALGN: Which Stock Is the Better Value Option?
Investors interested in Medical - Dental Supplies stocks are likely familiar with Merit Medical (MMSI) and Align Technology (ALGN). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Merit Medical and Align Technology are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that MMSI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
MMSI currently has a forward P/E ratio of 23.87, while ALGN has a forward P/E of 31.20. We also note that MMSI has a PEG ratio of 2.12. 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. ALGN currently has a PEG ratio of 2.49.
Another notable valuation metric for MMSI is its P/B ratio of 3.72. 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, ALGN has a P/B of 6.22.
These are just a few of the metrics contributing to MMSI's Value grade of B and ALGN's Value grade of C.
MMSI 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 MMSI is likely the superior value option right now.
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Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report
Align Technology, Inc. (ALGN) : Free Stock Analysis Report
