Investors interested in stocks from the Medical Services sector have probably already heard of Bausch + Lomb (BLCO) and Doximity (DOCS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Bausch + Lomb has a Zacks Rank of #2 (Buy), while Doximity has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BLCO has an improving earnings outlook. But this is only part of the picture for value investors.
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 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.
BLCO currently has a forward P/E ratio of 14.35, while DOCS has a forward P/E of 57.06. We also note that BLCO has a PEG ratio of 0.99. 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. DOCS currently has a PEG ratio of 15.40.
Another notable valuation metric for BLCO is its P/B ratio of 0.78. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, DOCS has a P/B of 8.69.
Based on these metrics and many more, BLCO holds a Value grade of A, while DOCS has a Value grade of D.
BLCO stands above DOCS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BLCO is the superior value option right now.
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Bausch Lomb Corporation (BLCO) : Free Stock Analysis Report
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