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GMAB or TECH: Which Is the Better Value Stock Right Now?

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Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Genmab A/S Sponsored ADR (GMAB - Free Report) and Techne (TECH - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Genmab A/S Sponsored ADR has a Zacks Rank of #2 (Buy), while Techne has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that GMAB likely has seen a stronger improvement to its earnings outlook than TECH has recently. However, value investors will care about much more than just this.

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.

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.

GMAB currently has a forward P/E ratio of 26.92, while TECH has a forward P/E of 39.55. We also note that GMAB has a PEG ratio of 2.01. 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. TECH currently has a PEG ratio of 5.46.

Another notable valuation metric for GMAB is its P/B ratio of 4.77. 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, TECH has a P/B of 5.78.

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

GMAB has seen stronger estimate revision activity and sports more attractive valuation metrics than TECH, so it seems like value investors will conclude that GMAB is the superior option right now.


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