Investors with an interest in Medical - Instruments stocks have likely encountered both SONOVA HOLDING (SONVY) 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.
Currently, SONOVA HOLDING has a Zacks Rank of #2 (Buy), while Idexx Laboratories has a Zacks Rank of #3 (Hold). This means that SONVY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SONVY currently has a forward P/E ratio of 20.14, while IDXX has a forward P/E of 41.81. We also note that SONVY has a PEG ratio of 3.06. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IDXX currently has a PEG ratio of 3.69.
Another notable valuation metric for SONVY is its P/B ratio of 4.8. 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 30.26.
Based on these metrics and many more, SONVY holds a Value grade of B, while IDXX has a Value grade of D.
SONVY sticks out from IDXX in both our Zacks Rank and Style Scores models, so value investors will likely feel that SONVY is the better option right now.
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SONOVA HOLDING (SONVY): 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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