Investors interested in Medical - Instruments stocks are likely familiar with Integra LifeSciences (IART) and SONOVA HOLDING (SONVY). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both Integra LifeSciences and SONOVA HOLDING are sporting a Zacks Rank of # 2 (Buy). 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. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
IART currently has a forward P/E ratio of 10.04, while SONVY has a forward P/E of 30.94. We also note that IART has a PEG ratio of 0.84. 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. SONVY currently has a PEG ratio of 3.56.
Another notable valuation metric for IART is its P/B ratio of 1.28. 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, SONVY has a P/B of 7.23.
These metrics, and several others, help IART earn a Value grade of A, while SONVY has been given a Value grade of D.
Both IART and SONVY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IART is the superior value option right now.
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Free: See Our Top Stock And 4 Runners UpIntegra LifeSciences Holdings Corporation (IART) : Free Stock Analysis Report
SONOVA HOLDING (SONVY) : 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.
