Back to top

Image: Bigstock

JAZZ vs. PCRX: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Medical - Drugs sector might want to consider either Jazz Pharmaceuticals (JAZZ - Free Report) or Pacira (PCRX - Free Report) . 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Jazz Pharmaceuticals has a Zacks Rank of #2 (Buy), while Pacira has a Zacks Rank of #3 (Hold). This means that JAZZ's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

JAZZ currently has a forward P/E ratio of 9.37, while PCRX has a forward P/E of 29.57. We also note that JAZZ has a PEG ratio of 0.98. 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. PCRX currently has a PEG ratio of 1.29.

Another notable valuation metric for JAZZ is its P/B ratio of 2.89. 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, PCRX has a P/B of 5.51.

These metrics, and several others, help JAZZ earn a Value grade of A, while PCRX has been given a Value grade of D.

JAZZ sticks out from PCRX in both our Zacks Rank and Style Scores models, so value investors will likely feel that JAZZ is the better option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Jazz Pharmaceuticals PLC (JAZZ) - free report >>

Pacira BioSciences, Inc. (PCRX) - free report >>

Published in