Back to top

Image: Bigstock

REGN vs. INCY: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Regeneron (REGN - Free Report) or Incyte (INCY - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Regeneron has a Zacks Rank of #2 (Buy), while Incyte has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that REGN likely has seen a stronger improvement to its earnings outlook than INCY has recently. 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

REGN currently has a forward P/E ratio of 10.75, while INCY has a forward P/E of 29.57. We also note that REGN has a PEG ratio of 0.59. 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. INCY currently has a PEG ratio of 0.82.

Another notable valuation metric for REGN is its P/B ratio of 4.73. 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, INCY has a P/B of 7.06.

Based on these metrics and many more, REGN holds a Value grade of B, while INCY has a Value grade of C.

REGN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that REGN is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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


Regeneron Pharmaceuticals, Inc. (REGN) - free report >>

Incyte Corporation (INCY) - free report >>

Published in