QDEL vs. RMD: Which Stock Is the Better Value Option?
Investors with an interest in Medical - Products stocks have likely encountered both Quidel (QDEL) and ResMed (RMD). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Quidel has a Zacks Rank of #2 (Buy), while ResMed has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that QDEL likely has seen a stronger improvement to its earnings outlook than RMD 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.
QDEL currently has a forward P/E ratio of 4.78, while RMD has a forward P/E of 41.58. We also note that QDEL has a PEG ratio of 0.19. 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. RMD currently has a PEG ratio of 2.86.
Another notable valuation metric for QDEL is its P/B ratio of 9.81. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, RMD has a P/B of 11.71.
These metrics, and several others, help QDEL earn a Value grade of B, while RMD has been given a Value grade of C.
QDEL has seen stronger estimate revision activity and sports more attractive valuation metrics than RMD, so it seems like value investors will conclude that QDEL is the superior option right now.
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Quidel Corporation (QDEL) : Free Stock Analysis Report
ResMed Inc. (RMD) : Free Stock Analysis Report
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