BMY vs. ARGX: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Bristol Myers Squibb (BMY) and argenex SE (ARGX). 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.
Right now, Bristol Myers Squibb is sporting a Zacks Rank of #2 (Buy), while argenex SE has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BMY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
BMY currently has a forward P/E ratio of 9.10, while ARGX has a forward P/E of 34.19. We also note that BMY has a PEG ratio of 0.30. 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. ARGX currently has a PEG ratio of 1.03.
Another notable valuation metric for BMY is its P/B ratio of 5.75. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ARGX has a P/B of 7.4.
These metrics, and several others, help BMY earn a Value grade of A, while ARGX has been given a Value grade of C.
BMY stands above ARGX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BMY is the superior value option right now.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpBristol Myers Squibb Company (BMY) : Free Stock Analysis Report
argenex SE (ARGX) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
