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ERFSF vs. ICLR: Which Stock Is the Better Value Option?

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Investors with an interest in Medical Services stocks have likely encountered both EUROFINS SCIENT (ERFSF - Free Report) and Icon PLC (ICLR - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, EUROFINS SCIENT has a Zacks Rank of #2 (Buy), while Icon PLC has a Zacks Rank of #3 (Hold). This means that ERFSF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

ERFSF currently has a forward P/E ratio of 21.69, while ICLR has a forward P/E of 21.86. We also note that ERFSF has a PEG ratio of 1.33. 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. ICLR currently has a PEG ratio of 2.06.

Another notable valuation metric for ERFSF is its P/B ratio of 2.25. 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, ICLR has a P/B of 5.31.

Based on these metrics and many more, ERFSF holds a Value grade of A, while ICLR has a Value grade of C.

ERFSF is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ERFSF is likely the superior value option right now.


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