Investors with an interest in Medical Info Systems stocks have likely encountered both Omnicell (OMCL) and Hims & Hers Health, Inc. (HIMS). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
Omnicell has a Zacks Rank of #2 (Buy), while Hims & Hers Health, Inc. has a Zacks Rank of #3 (Hold) right now. This means that OMCL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
OMCL currently has a forward P/E ratio of 21.30, while HIMS has a forward P/E of 75.44. We also note that OMCL has a PEG ratio of 2.48. 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. HIMS currently has a PEG ratio of 3.07.
Another notable valuation metric for OMCL is its P/B ratio of 1.26. 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, HIMS has a P/B of 17.81.
Based on these metrics and many more, OMCL holds a Value grade of B, while HIMS has a Value grade of D.
OMCL 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 OMCL is likely the superior value option right now.
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Omnicell, Inc. (OMCL): Free Stock Analysis Report Hims & Hers Health, Inc. (HIMS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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