Investors interested in Medical - Drugs stocks are likely familiar with Catalyst Pharmaceutical (CPRX) and Stevanato Group (STVN). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Catalyst Pharmaceutical and Stevanato Group are holding a Zacks Rank of #2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
CPRX currently has a forward P/E ratio of 9.24, while STVN has a forward P/E of 43.49. We also note that CPRX has a PEG ratio of 0.82. 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. STVN currently has a PEG ratio of 2.34.
Another notable valuation metric for CPRX is its P/B ratio of 3.19. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, STVN has a P/B of 4.98.
These are just a few of the metrics contributing to CPRX's Value grade of A and STVN's Value grade of C.
Both CPRX and STVN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CPRX is the superior value option right now.
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Catalyst Pharmaceuticals, Inc. (CPRX): Free Stock Analysis Report Stevanato Group S.p.A. (STVN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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