Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Regeneron (REGN) or Incyte (INCY). 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.
Currently, Regeneron has a Zacks Rank of #2 (Buy), while Incyte has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that REGN is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
REGN currently has a forward P/E ratio of 11.67, while INCY has a forward P/E of 26.98. We also note that REGN has a PEG ratio of 0.64. 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. INCY currently has a PEG ratio of 0.75.
Another notable valuation metric for REGN is its P/B ratio of 5.19. 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, INCY has a P/B of 6.38.
Based on these metrics and many more, REGN holds a Value grade of B, while INCY has a Value grade of C.
REGN stands above INCY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that REGN is the superior value option right now.
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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
Incyte Corporation (INCY) : Free Stock Analysis Report
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