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Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Exelixis (EXEL) and Techne (TECH). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Exelixis and Techne are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EXEL has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
EXEL currently has a forward P/E ratio of 17.10, while TECH has a forward P/E of 40.72. We also note that EXEL has a PEG ratio of 0.72. 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. TECH currently has a PEG ratio of 5.05.
Another notable valuation metric for EXEL is its P/B ratio of 4.54. 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, TECH has a P/B of 5.63.
These metrics, and several others, help EXEL earn a Value grade of B, while TECH has been given a Value grade of D.
EXEL stands above TECH thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EXEL is the superior value option right now.
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Exelixis, Inc. (EXEL) : Free Stock Analysis Report
Bio-Techne Corp (TECH) : Free Stock Analysis Report