Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Regeneron (REGN) and BioMarin Pharmaceutical (BMRN). 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.
Regeneron and BioMarin Pharmaceutical are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that REGN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 21.22, while BMRN has a forward P/E of 68.54. We also note that REGN has a PEG ratio of 1.08. 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. BMRN currently has a PEG ratio of 1.17.
Another notable valuation metric for REGN is its P/B ratio of 5.34. 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, BMRN has a P/B of 5.90.
These are just a few of the metrics contributing to REGN's Value grade of B and BMRN's Value grade of D.
REGN stands above BMRN 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
BioMarin Pharmaceutical Inc. (BMRN) : Free Stock Analysis Report
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