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NUVA vs. LZAGY: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Medical - Products sector might want to consider either NuVasive or Lonza Group Ag (LZAGY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

NuVasive and Lonza Group Ag are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NUVA is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

NUVA currently has a forward P/E ratio of 27.39, while LZAGY has a forward P/E of 27.78. We also note that NUVA has a PEG ratio of 2.15. 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. LZAGY currently has a PEG ratio of 2.32.

Another notable valuation metric for NUVA is its P/B ratio of 3.83. 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, LZAGY has a P/B of 4.11.

These metrics, and several others, help NUVA earn a Value grade of B, while LZAGY has been given a Value grade of D.

NUVA stands above LZAGY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NUVA is the superior value option right now.


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