Yahoo Finance GMED vs. PEN: Which Stock Is the Better Value Option?
Investors with an interest in Medical - Instruments stocks have likely encountered both Globus Medical (GMED) and Penumbra (PEN). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Globus Medical has a Zacks Rank of #2 (Buy), while Penumbra has a Zacks Rank of #3 (Hold) right now. This means that GMED's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
GMED currently has a forward P/E ratio of 19.04, while PEN has a forward P/E of 71.28. We also note that GMED has a PEG ratio of 1.51. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PEN currently has a PEG ratio of 2.
Another notable valuation metric for GMED is its P/B ratio of 1.75. 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, PEN has a P/B of 6.65.
These are just a few of the metrics contributing to GMED's Value grade of B and PEN's Value grade of D.
GMED stands above PEN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GMED is the superior value option right now.
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Globus Medical, Inc. (GMED) : Free Stock Analysis Report
Penumbra, Inc. (PEN) : Free Stock Analysis Report
