Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Harmony Biosciences Holdings, Inc. (HRMY) and argenex SE (ARGX). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Harmony Biosciences Holdings, Inc. is sporting a Zacks Rank of #1 (Strong 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 HRMY 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.
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.
HRMY currently has a forward P/E ratio of 9.48, while ARGX has a forward P/E of 29.52. We also note that HRMY has a PEG ratio of 0.35. 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 0.72.
Another notable valuation metric for HRMY is its P/B ratio of 2.61. 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, ARGX has a P/B of 8.36.
Based on these metrics and many more, HRMY holds a Value grade of A, while ARGX has a Value grade of C.
HRMY stands above ARGX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HRMY is the superior value option right now.
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Harmony Biosciences Holdings, Inc. (HRMY): Free Stock Analysis Report argenex SE (ARGX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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