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GDRX or LHCG: Which Is the Better Value Stock Right Now?
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Investors with an interest in Medical Services stocks have likely encountered both GoodRx Holdings, Inc. (GDRX - Free Report) and LHC Group . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, GoodRx Holdings, Inc. has a Zacks Rank of #2 (Buy), while LHC Group has a Zacks Rank of #5 (Strong Sell). This means that GDRX'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 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.
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.
GDRX currently has a forward P/E ratio of 15.42, while LHCG has a forward P/E of 35.36. We also note that GDRX has a PEG ratio of 0.94. 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. LHCG currently has a PEG ratio of 22.82.
Another notable valuation metric for GDRX is its P/B ratio of 1.97. 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, LHCG has a P/B of 3.08.
These are just a few of the metrics contributing to GDRX's Value grade of B and LHCG's Value grade of F.
GDRX 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 GDRX is likely the superior value option right now.
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GDRX or LHCG: Which Is the Better Value Stock Right Now?
Investors with an interest in Medical Services stocks have likely encountered both GoodRx Holdings, Inc. (GDRX - Free Report) and LHC Group . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, GoodRx Holdings, Inc. has a Zacks Rank of #2 (Buy), while LHC Group has a Zacks Rank of #5 (Strong Sell). This means that GDRX'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 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.
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.
GDRX currently has a forward P/E ratio of 15.42, while LHCG has a forward P/E of 35.36. We also note that GDRX has a PEG ratio of 0.94. 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. LHCG currently has a PEG ratio of 22.82.
Another notable valuation metric for GDRX is its P/B ratio of 1.97. 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, LHCG has a P/B of 3.08.
These are just a few of the metrics contributing to GDRX's Value grade of B and LHCG's Value grade of F.
GDRX 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 GDRX is likely the superior value option right now.