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Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Illumina (ILMN) and Alnylam Pharmaceuticals (ALNY). 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.
Illumina and Alnylam Pharmaceuticals are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
ILMN currently has a forward P/E ratio of 23.45, while ALNY has a forward P/E of 666.63. We also note that ILMN has a PEG ratio of 2.16. 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. ALNY currently has a PEG ratio of 20.47.
Another notable valuation metric for ILMN is its P/B ratio of 7.02. 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, ALNY has a P/B of 1,092.56.
Based on these metrics and many more, ILMN holds a Value grade of B, while ALNY has a Value grade of D.
Both ILMN and ALNY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ILMN is the superior value option right now.
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Illumina, Inc. (ILMN) : Free Stock Analysis Report
Alnylam Pharmaceuticals, Inc. (ALNY) : Free Stock Analysis Report