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ELV vs. GDRX: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Medical Services sector might want to consider either Elevance Health (ELV - Free Report) or GoodRx Holdings, Inc. (GDRX - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.

Both Elevance Health and GoodRx Holdings, Inc. have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

ELV currently has a forward P/E ratio of 16.43, while GDRX has a forward P/E of 23.27. We also note that ELV has a PEG ratio of 1.36. 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. GDRX currently has a PEG ratio of 1.40.

Another notable valuation metric for ELV is its P/B ratio of 3.15. 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, GDRX has a P/B of 3.33.

These metrics, and several others, help ELV earn a Value grade of A, while GDRX has been given a Value grade of C.

Both ELV and GDRX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ELV is the superior value option right now.


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GoodRx Holdings, Inc. (GDRX) - free report >>

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