Back to top

Image: Bigstock

EXEL or ILMN: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Exelixis (EXEL - Free Report) and Illumina (ILMN - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Exelixis has a Zacks Rank of #2 (Buy), while Illumina has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that EXEL likely has seen a stronger improvement to its earnings outlook than ILMN has recently. However, value investors will care about much more than just this.

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.

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.

EXEL currently has a forward P/E ratio of 21.33, while ILMN has a forward P/E of 190.68. We also note that EXEL has a PEG ratio of 0.58. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ILMN currently has a PEG ratio of 8.59.

Another notable valuation metric for EXEL is its P/B ratio of 2.64. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ILMN has a P/B of 4.09.

Based on these metrics and many more, EXEL holds a Value grade of B, while ILMN has a Value grade of D.

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


See More Zacks Research for These Tickers


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


Illumina, Inc. (ILMN) - free report >>

Exelixis, Inc. (EXEL) - free report >>

Published in