Subscribe to Entrepreneur for $5
Subscribe

GILD or VIR: Which Is the Better Value Stock Right Now?

GILD vs. VIR: Which Stock Is the Better Value Option?

By
This story originally appeared on Zacks

Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Gilead Sciences (GILD) or Vir Biotechnology, Inc. (VIR). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

- Zacks

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Gilead Sciences has a Zacks Rank of #2 (Buy), while Vir Biotechnology, Inc. 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 GILD has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

GILD currently has a forward P/E ratio of 9.04, while VIR has a forward P/E of 24.61. We also note that GILD has a PEG ratio of 0.75. 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. VIR currently has a PEG ratio of 2.23.

Another notable valuation metric for GILD is its P/B ratio of 4.26. 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, VIR has a P/B of 5.87.

These are just a few of the metrics contributing to GILD's Value grade of A and VIR's Value grade of D.

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



More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.

Click here for the 4 trades >>

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

 

Gilead Sciences, Inc. (GILD): Free Stock Analysis Report

 

Vir Biotechnology, Inc. (VIR): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research