KMDA vs. ILMN: Which Stock Is the Better Value Option?

Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Kamada (KMDA) and Illumina (ILMN). 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.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Kamada has a Zacks Rank of #2 (Buy), while Illumina has a Zacks Rank of #3 (Hold). This means that KMDA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

KMDA currently has a forward P/E ratio of 17.71, while ILMN has a forward P/E of 20.75. We also note that KMDA has a PEG ratio of 0.71. 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. ILMN currently has a PEG ratio of 2.25.

Another notable valuation metric for KMDA is its P/B ratio of 1.48. 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, ILMN has a P/B of 6.24.

These metrics, and several others, help KMDA earn a Value grade of A, while ILMN has been given a Value grade of C.

KMDA stands above ILMN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KMDA is the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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