Investors interested in stocks from the Medical Info Systems sector have probably already heard of AllScripts Healthcare (MDRX) and Omnicell (OMCL). 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.
AllScripts Healthcare has a Zacks Rank of #2 (Buy), while Omnicell 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 MDRX 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.
MDRX currently has a forward P/E ratio of 21.75, while OMCL has a forward P/E of 27.76. We also note that MDRX has a PEG ratio of 1.33. 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. OMCL currently has a PEG ratio of 2.52.
Another notable valuation metric for MDRX is its P/B ratio of 1.69. 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, OMCL has a P/B of 4.43.
Based on these metrics and many more, MDRX holds a Value grade of B, while OMCL has a Value grade of C.
MDRX stands above OMCL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MDRX is the superior value option right now.
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Allscripts Healthcare Solutions, Inc. (MDRX) : Free Stock Analysis Report
Omnicell, Inc. (OMCL) : Free Stock Analysis Report
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