QGEN vs. EXAS: Which Stock Is the Better Value Option?

Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Qiagen (QGEN) and Exact Sciences (EXAS). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Right now, Qiagen is sporting a Zacks Rank of #2 (Buy), while Exact Sciences has a Zacks Rank of #3 (Hold). This means that QGEN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 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.

QGEN currently has a forward P/E ratio of 19.95, while EXAS has a forward P/E of 1,167.56. We also note that QGEN has a PEG ratio of 2.38. 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. EXAS currently has a PEG ratio of 39.89.

Another notable valuation metric for QGEN is its P/B ratio of 3.05. 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, EXAS has a P/B of 4.13.

These metrics, and several others, help QGEN earn a Value grade of B, while EXAS has been given a Value grade of D.

QGEN 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 QGEN is likely the superior value option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research