Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Acadia Pharmaceuticals (ACAD) and Techne (TECH). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Acadia Pharmaceuticals has a Zacks Rank of #1 (Strong Buy), while Techne has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ACAD has 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.
ACAD currently has a forward P/E ratio of 27.92, while TECH has a forward P/E of 39.14. We also note that ACAD has a PEG ratio of 0.48. 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 4.82.
Another notable valuation metric for ACAD is its P/B ratio of 4.62. 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 5.62.
These are just a few of the metrics contributing to ACAD's Value grade of B and TECH's Value grade of D.
ACAD has seen stronger estimate revision activity and sports more attractive valuation metrics than TECH, so it seems like value investors will conclude that ACAD is the superior option right now.
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Today, See These 5 Potential Home Runs >>ACADIA Pharmaceuticals Inc. (ACAD) : Free Stock Analysis Report
Bio-Techne Corp (TECH) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
