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

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Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Exelixis (EXEL - Free Report) and argenex SE (ARGX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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 argenex SE 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 EXEL is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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.

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.

EXEL currently has a forward P/E ratio of 17.95, while ARGX has a forward P/E of 41.38. We also note that EXEL has a PEG ratio of 0.85. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ARGX currently has a PEG ratio of 0.96.

Another notable valuation metric for EXEL is its P/B ratio of 5.38. 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, ARGX has a P/B of 6.39.

These metrics, and several others, help EXEL earn a Value grade of B, while ARGX has been given a Value grade of C.

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

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