Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Regeneron (REGN) and Horizon Therapeutics (HZNP). 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 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 has a Zacks Rank of #2 (Buy), while Horizon Therapeutics has a Zacks Rank of #3 (Hold) 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. However, value investors will care about much more than just this.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
REGN currently has a forward P/E ratio of 13.34, while HZNP has a forward P/E of 19.64. We also note that REGN has a PEG ratio of 0.82. 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. HZNP currently has a PEG ratio of 1.64.
Another notable valuation metric for REGN is its P/B ratio of 3.76. 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, HZNP has a P/B of 4.62.
Based on these metrics and many more, REGN holds a Value grade of B, while HZNP has a Value grade of C.
REGN 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 REGN is likely the superior value option right now.
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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
Horizon Therapeutics Public Limited Company (HZNP) : Free Stock Analysis Report
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