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CELG or VRTX: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Celgene and Vertex Pharmaceuticals (VRTX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.
Right now, Celgene is sporting a Zacks Rank of #1 (Strong Buy), while Vertex Pharmaceuticals has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CELG is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
CELG currently has a forward P/E ratio of 8.29, while VRTX has a forward P/E of 46.42. We also note that CELG has a PEG ratio of 0.41. 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. VRTX currently has a PEG ratio of 1.18.
Another notable valuation metric for CELG is its P/B ratio of 12.37. 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, VRTX has a P/B of 16.89.
These metrics, and several others, help CELG earn a Value grade of A, while VRTX has been given a Value grade of D.
CELG stands above VRTX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CELG is the superior value option right now.
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CELG or VRTX: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Celgene and Vertex Pharmaceuticals (VRTX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.
Right now, Celgene is sporting a Zacks Rank of #1 (Strong Buy), while Vertex Pharmaceuticals has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CELG is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
CELG currently has a forward P/E ratio of 8.29, while VRTX has a forward P/E of 46.42. We also note that CELG has a PEG ratio of 0.41. 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. VRTX currently has a PEG ratio of 1.18.
Another notable valuation metric for CELG is its P/B ratio of 12.37. 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, VRTX has a P/B of 16.89.
These metrics, and several others, help CELG earn a Value grade of A, while VRTX has been given a Value grade of D.
CELG stands above VRTX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CELG is the superior value option right now.