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ALXN vs. QGEN: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Alexion Pharmaceuticals and Qiagen (QGEN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.

Alexion Pharmaceuticals and Qiagen are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that ALXN'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 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.

ALXN currently has a forward P/E ratio of 8.70, while QGEN has a forward P/E of 28.95. We also note that ALXN has a PEG ratio of 0.69. 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. QGEN currently has a PEG ratio of 2.97.

Another notable valuation metric for ALXN is its P/B ratio of 1.89. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, QGEN has a P/B of 3.57.

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

ALXN sticks out from QGEN in both our Zacks Rank and Style Scores models, so value investors will likely feel that ALXN is the better option right now.


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