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ERFSF vs. ICLR: Which Stock Should Value Investors Buy Now?

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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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

EUROFINS SCIENT and Icon PLC are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ERFSF has an improving earnings outlook. But this is only part of the picture for value investors.

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.

ERFSF currently has a forward P/E ratio of 22.59, while ICLR has a forward P/E of 22.74. We also note that ERFSF has a PEG ratio of 1.39. 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 2.15.

Another notable valuation metric for ERFSF is its P/B ratio of 2.34. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ICLR has a P/B of 5.52.

These are just a few of the metrics contributing to ERFSF's Value grade of B and ICLR's Value grade of C.

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


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