Investors with an interest in Medical - Drugs stocks have likely encountered both United Therapeutics (UTHR) and Corcept Therapeutics (CORT). But which of these two stocks presents investors with the better value opportunity right now? 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.
Currently, United Therapeutics has a Zacks Rank of #2 (Buy), while Corcept Therapeutics 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 UTHR has an improving earnings outlook. But this is only part of the picture 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 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.
UTHR currently has a forward P/E ratio of 15.87, while CORT has a forward P/E of 28.12. We also note that UTHR has a PEG ratio of 1.76. 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. CORT currently has a PEG ratio of 2.50.
Another notable valuation metric for UTHR is its P/B ratio of 2.63. 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, CORT has a P/B of 5.88.
These metrics, and several others, help UTHR earn a Value grade of B, while CORT has been given a Value grade of C.
UTHR sticks out from CORT in both our Zacks Rank and Style Scores models, so value investors will likely feel that UTHR is the better option right now.
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United Therapeutics Corporation (UTHR) : Free Stock Analysis Report
Corcept Therapeutics Incorporated (CORT) : Free Stock Analysis Report
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