Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Exelixis (EXEL) and argenex SE (ARGX). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Exelixis is sporting a Zacks Rank of #2 (Buy), while argenex SE has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EXEL is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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 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.
EXEL currently has a forward P/E ratio of 16.86, while ARGX has a forward P/E of 44.10. We also note that EXEL has a PEG ratio of 0.80. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ARGX currently has a PEG ratio of 0.98.
Another notable valuation metric for EXEL is its P/B ratio of 5.75. 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, ARGX has a P/B of 6.24.
These are just a few of the metrics contributing to EXEL's Value grade of B and ARGX's Value grade of C.
EXEL sticks out from ARGX in both our Zacks Rank and Style Scores models, so value investors will likely feel that EXEL is the better option right now.
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Exelixis, Inc. (EXEL): Free Stock Analysis Report argenex SE (ARGX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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