Investors interested in Medical Services stocks are likely familiar with BrightSpring Health Services, Inc. (BTSG) and Medpace (MEDP). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, BrightSpring Health Services, Inc. has a Zacks Rank of #1 (Strong Buy), while Medpace has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BTSG has an improving earnings outlook. 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.
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.
BTSG currently has a forward P/E ratio of 30.98, while MEDP has a forward P/E of 40.02. We also note that BTSG has a PEG ratio of 0.58. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MEDP currently has a PEG ratio of 2.22.
Another notable valuation metric for BTSG is its P/B ratio of 3.43. 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, MEDP has a P/B of 56.77.
These are just a few of the metrics contributing to BTSG's Value grade of B and MEDP's Value grade of D.
BTSG stands above MEDP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BTSG is the superior value option right now.
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BrightSpring Health Services, Inc. (BTSG): Free Stock Analysis Report Medpace Holdings, Inc. (MEDP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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