Investors interested in Medical - Instruments stocks are likely familiar with IQVIA Holdings (IQV) and Idexx Laboratories (IDXX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
IQVIA Holdings and Idexx Laboratories are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IQV has an improving earnings 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.
IQV currently has a forward P/E ratio of 15.76, while IDXX has a forward P/E of 43.67. We also note that IQV has a PEG ratio of 1.88. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IDXX currently has a PEG ratio of 3.86.
Another notable valuation metric for IQV is its P/B ratio of 5.52. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, IDXX has a P/B of 31.46.
These metrics, and several others, help IQV earn a Value grade of B, while IDXX has been given a Value grade of D.
IQV 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 IQV is likely the superior value option right now.
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IQVIA Holdings Inc. (IQV): Free Stock Analysis Report IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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