Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Ligand Pharmaceuticals (LGND) and Repligen (RGEN). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Ligand Pharmaceuticals has a Zacks Rank of #1 (Strong Buy), while Repligen has a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that LGND has an improving earnings outlook. But this is only part of the picture 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.
LGND currently has a forward P/E ratio of 30.17, while RGEN has a forward P/E of 112.41. We also note that LGND has a PEG ratio of 2.01. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RGEN currently has a PEG ratio of 5.11.
Another notable valuation metric for LGND is its P/B ratio of 2.71. 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, RGEN has a P/B of 6.19.
Based on these metrics and many more, LGND holds a Value grade of B, while RGEN has a Value grade of C.
LGND stands above RGEN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LGND is the superior value option right now.
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Ligand Pharmaceuticals Incorporated (LGND) : Free Stock Analysis Report
Repligen Corporation (RGEN) : Free Stock Analysis Report
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