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ELV vs. GDRX: Which Stock Is the Better Value Option?

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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.

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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Elevance Health and GoodRx Holdings, Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ELV has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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 14.04, while GDRX has a forward P/E of 24.23. We also note that ELV has a PEG ratio of 1.16. 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. GDRX currently has a PEG ratio of 1.94.

Another notable valuation metric for ELV is its P/B ratio of 2.83. 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, GDRX has a P/B of 2.92.

These are just a few of the metrics contributing to ELV's Value grade of A and GDRX's Value grade of D.

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


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

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