Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Alexion Pharmaceuticals (NASDAQ:ALXN) and Horizon Therapeutics (HZNP). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Alexion Pharmaceuticals has a Zacks Rank of #2 (Buy), while Horizon Therapeutics has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ALXN has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
ALXN currently has a forward P/E ratio of 10.74, while HZNP has a forward P/E of 19. We also note that ALXN has a PEG ratio of 0.77. 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. HZNP currently has a PEG ratio of 1.78.
Another notable valuation metric for ALXN is its P/B ratio of 2.37. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HZNP has a P/B of 4.27.
Based on these metrics and many more, ALXN holds a Value grade of B, while HZNP has a Value grade of C.
ALXN sticks out from HZNP in both our Zacks Rank and Style Scores models, so value investors will likely feel that ALXN is the better option right now.
Alexion Pharmaceuticals, Inc. (ALXN): Free Stock Analysis Report
Horizon Therapeutics Public Limited Company (HZNP): Free Stock Analysis Report
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