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EBS vs. ILMN: Which Stock Is the Better Value Option?

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Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Emergent Biosolutions (EBS - Free Report) and Illumina (ILMN - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Emergent Biosolutions is sporting a Zacks Rank of #1 (Strong Buy), while Illumina has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EBS has an improving earnings outlook. However, value investors will care about much more than just this.

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 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.

EBS currently has a forward P/E ratio of 15.09, while ILMN has a forward P/E of 46.73. We also note that EBS has a PEG ratio of 0.75. 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. ILMN currently has a PEG ratio of 2.23.

Another notable valuation metric for EBS is its P/B ratio of 2.70. 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, ILMN has a P/B of 10.92.

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

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


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