Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Biotechnology & Medical Research industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Biotechnology & Medical Research Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

Click the button below to learn more about A+ Investor and subscribe today.

7 Undervalued Biotechnology & Medical Research Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Biotechnology & Medical Research industry for Monday, March 04, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Biotechnology & Medical Research industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

AEterna Zentaris Inc. (USA)’s Value Grade

Value Grade:

Aeterna Zentaris Inc. is a Canada-based specialty biopharmaceutical company. The Company is developing and commercializing a diversified portfolio of pharmaceutical and diagnostic products focused on areas of significant unmet medical need. The Company's lead product, macimorelin (Macrilen, Ghryvelin), is an oral test indicated for the diagnosis of adult growth hormone deficiency (AGHD). The Company is also leveraging the clinical and compelling safety profile of macimorelin to develop it for the diagnosis of childhood-onset growth hormone deficiency (CGHD). The Company is engaged in the development of its therapeutic asset and has established a pre-clinical development pipeline to potentially address unmet medical needs across a number of indications, including neuromyelitis optica spectrum disorder (NMOSD), Parkinson's disease (PD), hypoparathyroidism and amyotrophic lateral sclerosis (ALS). Its therapeutic development pipeline includes AIM Biologicals, AEZS-150 and AEZS-130.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

AEterna Zentaris Inc. (USA) has a Value Score of 90, which is considered to be undervalued.

When you look at AEterna Zentaris Inc. (USA)’s price-to-sales ratio at 1.34 compared to the industry median at 9.15, this company has a lower price relative to revenue compared to its peers. This could make AEterna Zentaris Inc. (USA)’s stock more attractive for value investors.

Now, let’s assess AEterna Zentaris Inc. (USA)’s EV/EBITDA ratio, also known as enterprise multiple. At 1.4, when compared to the industry median of 0.9, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. AEterna Zentaris Inc. (USA)’s shareholder yield is higher than its industry median ratio of (10.13%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. AEterna Zentaris Inc. (USA)’s price-to-book ratio is lower than its industry median ratio of 2.10. This could make AEterna Zentaris Inc. (USA) more attractive to investors looking for a new addition to their portfolio.

Aligos Therapeutics Inc’s Value Grade

Value Grade:

Aligos Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing therapeutics to address unmet medical needs in viral infections and liver diseases. It uses its small molecule and oligonucleotide platforms to develop pharmacologically optimized drug candidates for use in combination regimens. Its primary area of focus is on developing functional cure for nonalcoholic steatohepatitis (NASH) and to develop drug candidates with coronavirus activity, as well as seeks to enhance the rate of functional cure for chronic hepatitis B (CHB). It has developed a portfolio of differentiated drug candidates for CHB, including a small molecule capsid assembly modulator (CAM-E) and oligonucleotide small interfering ribonucleic acids (siRNA), each of which is designed against clinically validated targets in the hepatitis B virus (HBV) life cycle. Its pipeline includes ALG-055009 for the treatment of NASH; ALG-000184 and ALG-125755 for CHB, and ALG-097558 for coronavirus.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Aligos Therapeutics Inc has a Value Score of 65, which is considered to be undervalued.

Aligos Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make Aligos Therapeutics Inc less attractive for value investors when compared to the industry median at 2.10.

You can read more about Aligos Therapeutics Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Benitec Biopharma Inc’s Value Grade

Value Grade:

Benitec Biopharma Inc. is a clinical-stage biotechnology company focused on the advancement of novel genetic medicines with headquarters in Hayward, California. The Company’s platform, DNA-directed RNA interference (ddRNAi), combines ribonucleic acid (RNA) interference with gene therapy to create medicines that facilitate sustained silencing of disease-causing genes following a single administration. The Company is also engaged in developing a silence and replace-based therapeutic (BB-301) for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), a chronic, life-threatening genetic disorder. The Company's BB-301 is an adeno-associated viral vector (AAV)-based gene therapy designed to permanently silence the expression of the disease-causing gene (to slow, or halt, the biological mechanisms underlying disease progression in OPMD) and to simultaneously replace the mutant gene with a wildtype gene (to drive restoration of function in diseased cells).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Benitec Biopharma Inc has a Value Score of 64, which is considered to be undervalued.

Benitec Biopharma Inc’s price-to-book ratio is higher than its peers. This could make Benitec Biopharma Inc less attractive for value investors when compared to the industry median at 2.10.

You can read more about Benitec Biopharma Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Forte Biosciences Inc’s Value Grade

Value Grade:

Forte Biosciences, Inc. is a biopharmaceutical company. The Company is advancing through preclinical trials its product candidate, FB-102, which is a therapeutic molecule with potentially autoimmune applications in such indications as graft-versus-host disease (GvHD), vitiligo and alopecia areata (AA). FB-102 is an antagonist of autoimmune disease pathways with the potential for a durable response. The Company?s subsidiaries include Forte Subsidiary, Inc. and Forte Biosciences Emerald Limited.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Forte Biosciences Inc has a Value Score of 68, which is considered to be undervalued.

Forte Biosciences Inc’s price-to-book ratio is higher than its peers. This could make Forte Biosciences Inc less attractive for value investors when compared to the industry median at 2.10.

You can read more about Forte Biosciences Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Finch Therapeutics Group Inc’s Value Grade

Value Grade:

Finch Therapeutics Group, Inc. is a microbiome technology company with a portfolio of intellectual property and microbiome assets. It is focused on realizing the value of its intellectual property estate and other assets, while supporting the advancement of its microbiome technology through partnerships and collaborations. It has an intellectual property estate, including more than 70 issued U.S. and foreign patents with relevance for both donor-derived and donor-independent microbiome therapeutics in a range of potential indications. The Company?s assets include CP101, an orally administered microbiome candidate designed for the prevention of recurrent C. difficile infection (CDI), with positive clinical data from a Phase II randomized, placebo-controlled trial and a Phase II open-label trial, and pre-clinical assets that are designed to target ulcerative colitis, Crohn?s disease, and autism spectrum disorder. Additionally, it has also developed a biorepository of strains and samples.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Finch Therapeutics Group Inc has a Value Score of 66, which is considered to be undervalued.

Finch Therapeutics Group Inc’s price-to-book ratio is higher than its peers. This could make Finch Therapeutics Group Inc less attractive for value investors when compared to the industry median at 2.10.

You can read more about Finch Therapeutics Group Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Pasithea Therapeutics Corp’s Value Grade

Value Grade:

Pasithea Therapeutics Corp. is a biotechnology company. The Company is primarily focused on the discovery, research and development of treatments for Central Nervous System (CNS) disorders and RASopathies. The Company operates through two segments: Therapeutics and Clinics. Its Therapeutics segment performs activities related to the discovery, research, and development of treatments for CNS disorders and other diseases. Its Clinics segment provides business support services to anti-depression clinics in the United Kingdom and in the United States. Its therapeutic pipeline consists of four programs. Its lead product candidate, PAS-004, is a macrocyclic mitogen-activated protein kinase (MEK) inhibitor for potential use in the treatment of a range of RASopathies, including neurofibromatosis type 1 (NF1) and Noonan syndrome, as well as lamin A/C (LMNA) cardiomyopathy and a number of oncology indications. Its other three programs are in the discovery stage.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Pasithea Therapeutics Corp has a Value Score of 88, which is considered to be undervalued.

Pasithea Therapeutics Corp’s price-to-book ratio is higher than its peers. This could make Pasithea Therapeutics Corp less attractive for value investors when compared to the industry median at 2.10.

You can read more about Pasithea Therapeutics Corp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

PepGen Inc’s Value Grade

Value Grade:

PepGen Inc. is a biopharmaceutical company. The Company is engaged in developing a transformative oligonucleotide delivery technology and pipeline of product candidates to treat neuromuscular and neurologic diseases. Its enhanced delivery oligonucleotide (EDO), platform leverages cell-penetrating peptides to improve the uptake and activity of conjugated oligonucleotide therapeutics. The Company, through its EDO platform, is developing a pipeline of disease-modifying peptide-conjugated oligonucleotide candidates to treat a variety of degenerative neuromuscular diseases. Its lead product candidates include PGN-EDO51 and PGN-EDODM1. Its lead product candidate, PGN-EDO51, is an EDO peptide conjugated to a phosphorodiamidate morpholino oligomer (PMO) therapeutic cargo, which is developed for the treatment of duchenne muscular dystrophy (DMD) patients with mutations amenable to exon 51-skipping approach. It is also developing PGN-EDODM1, for the treatment of myotonic dystrophy type 1 (DM1).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

PepGen Inc has a Value Score of 61, which is considered to be undervalued.

PepGen Inc’s price-to-book ratio is lower than its peers. This could make PepGen Inc more attractive for value investors when compared to the industry median at 2.10.

You can read more about PepGen Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Biotechnology & Medical Research Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Biotechnology & Medical Research stocks as well as other industrys.

Choosing Which of the 7 Best Biotechnology & Medical Research Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• AEterna Zentaris Inc. (USA) stock has a Value Grade of A.
• Aligos Therapeutics Inc stock has a Value Grade of B.
• Benitec Biopharma Inc stock has a Value Grade of B.
• Forte Biosciences Inc stock has a Value Grade of B.
• Finch Therapeutics Group Inc stock has a Value Grade of B.
• Pasithea Therapeutics Corp stock has a Value Grade of A.
• PepGen Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 undervalued stocks in the Biotechnology & Medical Research industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Biotechnology & Medical Research Stocks

Want to learn more about Biotechnology & Medical Research stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 7 Undervalued Biotechnology & Medical Research Stocks for Monday, March 04
• 6 Undervalued Biotechnology & Medical Research Stocks for Friday, March 01
• Why 2Seventy Bio Inc’s (TSVT) Stock Is Up 8.46%
• Why 4D Molecular Therapeutics Inc’s (FDMT) Stock Is Up 4.82%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.