Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Fortrea Holdings Inc. (FTRE) and argenex SE (ARGX). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Fortrea Holdings Inc. and argenex SE are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FTRE 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
FTRE currently has a forward P/E ratio of 22.10, while ARGX has a forward P/E of 31.92. We also note that FTRE has a PEG ratio of 0.46. 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. ARGX currently has a PEG ratio of 1.13.
Another notable valuation metric for FTRE is its P/B ratio of 3.46. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ARGX has a P/B of 6.49.
These metrics, and several others, help FTRE earn a Value grade of A, while ARGX has been given a Value grade of C.
FTRE sticks out from ARGX in both our Zacks Rank and Style Scores models, so value investors will likely feel that FTRE is the better option right now.
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argenex SE (ARGX) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
