PGNY vs. CRL: Which Stock Is the Better Value Option?
Investors looking for stocks in the Medical Services sector might want to consider either Progyny (PGNY) or Charles River Laboratories (CRL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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.
Both Progyny and Charles River Laboratories have 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 piece of the puzzle for value investors.
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.
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.
PGNY currently has a forward P/E ratio of 12.92, while CRL has a forward P/E of 24.87. We also note that PGNY has a PEG ratio of 1.12. 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. CRL currently has a PEG ratio of 2.76.
Another notable valuation metric for PGNY is its P/B ratio of 4.67. 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, CRL has a P/B of 4.72.
These metrics, and several others, help PGNY earn a Value grade of B, while CRL has been given a Value grade of D.
Both PGNY and CRL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PGNY is the superior value option right now.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpProgyny, Inc. (PGNY) : Free Stock Analysis Report
Charles River Laboratories International, Inc. (CRL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
