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

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Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of BioMarin Pharmaceutical (BMRN - Free Report) and Incyte (INCY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, BioMarin Pharmaceutical has a Zacks Rank of #2 (Buy), while Incyte 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 BMRN is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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 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.

BMRN currently has a forward P/E ratio of 20.37, while INCY has a forward P/E of 54.33. We also note that BMRN has a PEG ratio of 0.50. 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. INCY currently has a PEG ratio of 2.48.

Another notable valuation metric for BMRN is its P/B ratio of 2.34. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, INCY has a P/B of 4.62.

These metrics, and several others, help BMRN earn a Value grade of B, while INCY has been given a Value grade of C.

BMRN stands above INCY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BMRN is the superior value option right now.


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