OMCL vs. HIMS: Which Stock Is the Better Value Option?

Investors interested in Medical Info Systems stocks are likely familiar with Omnicell (OMCL) and Hims & Hers Health, Inc. (HIMS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Omnicell and Hims & Hers Health, Inc. are sporting Zacks Ranks of #1 (Strong Buy) and #5 (Strong Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that OMCL has an improving earnings outlook. But this is only part of the picture 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

OMCL currently has a forward P/E ratio of 20.62, while HIMS has a forward P/E of 724.50. We also note that OMCL has a PEG ratio of 0.70. 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. HIMS currently has a PEG ratio of 54.37.

Another notable valuation metric for OMCL is its P/B ratio of 1.47. 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, HIMS has a P/B of 14.98.

Based on these metrics and many more, OMCL holds a Value grade of B, while HIMS has a Value grade of F.

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

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This article originally published on Zacks Investment Research (zacks.com).

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