CERN vs. OMCL: Which Stock Should Value Investors Buy Now?
CERN vs. OMCL: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical Info Systems sector have probably already heard of Cerner (CERN) 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Cerner and Omnicell are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
CERN currently has a forward P/E ratio of 27.47, while OMCL has a forward P/E of 46.88. We also note that CERN has a PEG ratio of 2.06. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OMCL currently has a PEG ratio of 2.93.
Another notable valuation metric for CERN is its P/B ratio of 6.95. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, OMCL has a P/B of 7.06.
These metrics, and several others, help CERN earn a Value grade of B, while OMCL has been given a Value grade of D.
Both CERN and OMCL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CERN is the superior value option right now.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cerner Corporation (CERN): Free Stock Analysis Report
Omnicell, Inc. (OMCL): Free Stock Analysis Report
To read this article on Zacks.com click here.