Back to top

Image: Bigstock

CNMD vs. ALGN: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in Medical - Dental Supplies stocks are likely familiar with Conmed (CNMD - Free Report) and Align Technology (ALGN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.

Conmed has a Zacks Rank of #2 (Buy), while Align Technology has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CNMD is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

CNMD currently has a forward P/E ratio of 14.20, while ALGN has a forward P/E of 20.53. We also note that CNMD has a PEG ratio of 0.74. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ALGN currently has a PEG ratio of 3.68.

Another notable valuation metric for CNMD is its P/B ratio of 2.27. 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, ALGN has a P/B of 3.95.

These are just a few of the metrics contributing to CNMD's Value grade of A and ALGN's Value grade of C.

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


See More Zacks Research for These Tickers


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


CONMED Corporation (CNMD) - free report >>

Align Technology, Inc. (ALGN) - free report >>

Published in