ALXN vs. CBM: Which Stock Should Value Investors Buy Now?
Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Alexion Pharmaceuticals (ALXN) and Cambrex (CBM). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Alexion Pharmaceuticals has a Zacks Rank of #2 (Buy), while Cambrex 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. However, value investors will care about much more than just this.
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.
ALXN currently has a forward P/E ratio of 9.53, while CBM has a forward P/E of 29.07. We also note that ALXN 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. CBM currently has a PEG ratio of 2.91.
Another notable valuation metric for ALXN is its P/B ratio of 2.09. 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, CBM has a P/B of 2.96.
These are just a few of the metrics contributing to ALXN's Value grade of B and CBM's Value grade of C.
ALXN has seen stronger estimate revision activity and sports more attractive valuation metrics than CBM, so it seems like value investors will conclude that ALXN is the superior option right now.
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Alexion Pharmaceuticals, Inc. (ALXN): 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.