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ALXN vs. BMRN: Which Stock Is the Better Value Option?

Zacks Equity Research
·2-min read

Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Alexion Pharmaceuticals (ALXN) and BioMarin Pharmaceutical (BMRN). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Alexion Pharmaceuticals and BioMarin Pharmaceutical 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 ALXN is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

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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.

ALXN currently has a forward P/E ratio of 12.06, while BMRN has a forward P/E of 53.17. We also note that ALXN has a PEG ratio of 0.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BMRN currently has a PEG ratio of 1.32.

Another notable valuation metric for ALXN is its P/B ratio of 2.90. 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, BMRN has a P/B of 3.83.

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

ALXN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ALXN is likely the superior value option right now.


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BioMarin Pharmaceutical Inc. (BMRN) : Free Stock Analysis Report
 
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