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CTLT vs. NBIX: Which Stock Should Value Investors Buy Now?

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Investors interested in Medical - Drugs stocks are likely familiar with Catalent (CTLT - Free Report) and Neurocrine Biosciences (NBIX - 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 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.

Right now, Catalent is sporting a Zacks Rank of #2 (Buy), while Neurocrine Biosciences has a Zacks Rank of #3 (Hold). This means that CTLT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.

CTLT currently has a forward P/E ratio of 21.73, while NBIX has a forward P/E of 743.55. We also note that CTLT has a PEG ratio of 2.02. 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. NBIX currently has a PEG ratio of 30.98.

Another notable valuation metric for CTLT is its P/B ratio of 3.72. 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, NBIX has a P/B of 17.15.

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

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


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Neurocrine Biosciences, Inc. (NBIX) - free report >>

Catalent, Inc. (CTLT) - free report >>

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