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.

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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 Wednesday, March 27, 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.

Avalo Therapeutics Inc’s Value Grade

Value Grade:

Avalo Therapeutics, Inc. is a clinical-stage biotechnology company. The Company is focused on the treatment of immune dysregulation by developing therapies that target the Lymphotoxin-like, exhibits Inducible expression, and competes with Herpes Virus Glycoprotein D for Herpesvirus Entry Mediator (HVEM), a receptor expressed by T lymphocytes (LIGHT)-signaling network. It is focused on advancing a pipeline that emphasizes high value potential first-in-class biologics focused on dysregulated inflammation through the LIGHT-signaling network. Its pipeline includes AVTX-002, and AVTX-008. AVTX-002 is an Anti-LIGHT monoclonal antibody for treatment of non-eosinophilic asthma, Crohn’s Disease, and COVID-19 acute respiratory distress syndromes. AVTX-008 is a fully human B and T lymphocyte attenuator (BTLA) agonist fusion protein that is being evaluated for several immune dysregulation disorders.

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.

Avalo Therapeutics Inc has a Value Score of 85, which is considered to be undervalued.

When you look at Avalo Therapeutics Inc’s price-to-sales ratio at 0.40 compared to the industry median at 8.61, this company has a lower price relative to revenue compared to its peers. This could make Avalo Therapeutics Inc’s stock more attractive for value investors.

Now, let’s assess Avalo Therapeutics Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 0.2, when compared to the industry median of 1.1, the company may be considered undervalued 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. Avalo Therapeutics Inc’s shareholder yield is lower than its industry median ratio of (9.92%). 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. Avalo Therapeutics Inc’s price-to-book ratio is lower than its industry median ratio of 2.08. This could make Avalo Therapeutics Inc more attractive to investors looking for a new addition to their portfolio.

Estrella Immunopharma Inc’s Value Grade

Value Grade:

Estrella Immunopharma, Inc. is a preclinical-stage biopharmaceutical company. The Company is developing CD19 and CD22-targeted ARTEMIS T-cell therapies with the capacity to address treatment challenges for patients with blood cancers and solid tumors. Its lead product candidate, EB103, utilizes Eureka's ARTEMIS technology to target CD19, a protein expressed on the surface of almost all B-cell leukemias and lymphomas. The Company is also developing EB104, which also utilizes Eureka's ARTEMIS technology to target not only CD19, but also CD22, a protein that, like CD19, is expressed on the surface of most B-cell malignancies. The Company is also collaborating with Imugene Limited and its product candidate, CF33-CD19t an oncolytic virus (CF33-CD19t), to research the use of EB103 in conjunction with CF33-CD19t to treat solid tumors.

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.

Estrella Immunopharma Inc has a Value Score of 100, which is considered to be undervalued.

Estrella Immunopharma Inc’s price-to-book ratio is higher than its peers. This could make Estrella Immunopharma Inc less attractive for value investors when compared to the industry median at 2.08.

You can read more about Estrella Immunopharma 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.

Lenz Therapeutics Inc’s Value Grade

Value Grade:

LENZ Therapeutics, Inc. is a late clinical-stage biopharmaceutical company. The Company is focused on developing the first aceclidine-based eye drop to improve vision in patients diagnosed with presbyopia. Its product candidates, LNZ100 and LNZ101, are preservative-free, single-use, once-daily eye drops containing aceclidine and aceclidine plus brimonidine, respectively. LNZ100 and LNZ101 are under clinical evaluation in the registration-enabling Phase III CLARITY trials as potential therapies for the treatment of presbyopia, a condition impacting an estimated 1.8 billion people globally and 128 million people in the United States.

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.

Lenz Therapeutics Inc has a Value Score of 81, which is considered to be undervalued.

Lenz Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make Lenz Therapeutics Inc less attractive for value investors when compared to the industry median at 2.08.

You can read more about Lenz 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.

Medicure Inc’s Value Grade

Value Grade:

Medicure Inc. is a Canada-based pharmaceutical company. The Company is focused on the development and commercialization of therapies for the United States cardiovascular market. The focus of the Company is the marketing and distribution of AGGRASTAT (tirofiban hydrochloride) injection and ZYPITAMAG (pitavastatin) tablets in the United States, where they are sold through the Company’s United States subsidiary, Medicure Pharma Inc. The Company also operates Marley Drug, Inc. (Marley Drug), a pharmacy located in North Carolina that offers an Extended Supply drug program serving all 50 states, Washington D.C. and Puerto Rico. Marley Drug is committed to improving the health status of its patients and the communities they serve while reducing overall health care costs for employers and other health care consumers. AGGRASTAT is indicated to reduce the rate of thrombotic cardiovascular events in patients with non-ST elevation acute coronary syndrome (NSTE-ACS).

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.

Medicure Inc has a Value Score of 85, which is considered to be undervalued.

Medicure Inc’s price-earnings ratio is 11.3 compared to the industry median at 27.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Medicure Inc more attractive for value investors.

Medicure Inc’s price-to-book ratio is higher than its peers. This could make Medicure Inc less attractive for value investors when compared to the industry median at 2.08.

You can read more about Medicure 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.

NovaBay Pharmaceuticals Inc’s Value Grade

Value Grade:

NovaBay Pharmaceuticals, Inc. develops and sells scientifically created and clinically proven eyecare and wound care products. Its product, Avenova Antimicrobial Lid and Lash Solution, has antimicrobial properties as it removes foreign material including microorganisms and debris from the skin around the eye, including the eyelid. It offers a portfolio of products for each step of the standard at home treatment regimen, including the Avenova Eye Health Support antioxidant-rich oral supplement, Avenova Lubricating Eye Drops for instant relief, NovaWipes by Avenova, Avenova Warm Eye Compress to soothe the eyes, and the i-Chek by Avenova to monitor physical eyelid health. It also manufactures and sells its proprietary form of hypochlorous acid for the wound care market with its NeutroPhase and PhaseOne branded products. NeutroPhase and PhaseOne are used for cleansing and irrigation as part of surgical procedures, as well as treating certain wounds, burns, ulcers and other injuries.

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.

NovaBay Pharmaceuticals Inc has a Value Score of 73, which is considered to be undervalued.

NovaBay Pharmaceuticals Inc’s price-to-book ratio is higher than its peers. This could make NovaBay Pharmaceuticals Inc less attractive for value investors when compared to the industry median at 2.08.

You can read more about NovaBay Pharmaceuticals 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.

NuCana PLC (ADR)’s Value Grade

Value Grade:

NuCana plc is a United Kingdom-based clinical-stage biopharmaceutical company. The Company is focused on developing treatment outcomes for patients with cancer by applying its ProTide technology. The Company's pipeline includes NUC-3373, and NUC-7738. NUC-3373 is a ProTide transformation of the active anti-cancer metabolite of 5-fluorouracil (5-FU). 5-FU is a prescribed anti-cancer agent. NUC-3373 has been evaluated in a Phase I clinical trial for patients with advanced solid tumors and is under Phase Ib/II clinical trial for patients with advanced colorectal cancer. NUC-7738 is a ProTide transformation of a nucleoside analog, 3’-deoxyadenosine (3’-Da). The Company is evaluating NUC-7738 in a Phase I/II clinical trial for patients with advanced solid tumors. Its pipeline also includes Acelari. The Company’s subsidiaries include NuCana, Inc., NuCana Limited and NuCana BioMed Trustee Company 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.

NuCana PLC (ADR) has a Value Score of 88, which is considered to be undervalued.

NuCana PLC (ADR)’s price-to-book ratio is higher than its peers. This could make NuCana PLC (ADR) less attractive for value investors when compared to the industry median at 2.08.

You can read more about NuCana PLC (ADR)’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.

Third Harmonic Bio Inc’s Value Grade

Value Grade:

Third Harmonic Bio, Inc. is a biopharmaceutical company. The Company is engaged in the development of medicine for the treatment of inflammatory diseases, including dermal, respiratory, and gastrointestinal diseases. It is focused on developing oral small-molecule inhibitors of KIT, a cell surface receptor that serves as the master regulator of mast cell function and survival. Mast cells are a part of the immune system, and dysfunctional mast cell activity has been implicated in the pathophysiology of a broad range of inflammatory disorders including urticaria, asthma and gastrointestinal disorders, among others. The Company?s clinical studies demonstrate that KIT inhibition is used for the treatment of a range of mast-cell-mediated inflammatory diseases, and that a titratable, oral, intracellular small molecule inhibitor may provide the optimal therapeutic profile against this target.

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.

Third Harmonic Bio Inc has a Value Score of 76, which is considered to be undervalued.

Third Harmonic Bio Inc’s price-to-book ratio is higher than its peers. This could make Third Harmonic Bio Inc less attractive for value investors when compared to the industry median at 2.08.

You can read more about Third Harmonic Bio 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.

• Avalo Therapeutics Inc stock has a Value Grade of A.
• Estrella Immunopharma Inc stock has a Value Grade of A.
• Lenz Therapeutics Inc stock has a Value Grade of A.
• Medicure Inc stock has a Value Grade of A.
• NovaBay Pharmaceuticals Inc stock has a Value Grade of B.
• NuCana PLC (ADR) stock has a Value Grade of A.
• Third Harmonic Bio 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 Wednesday, March 27
• 5 Undervalued Biotechnology & Medical Research Stocks for Tuesday, March 26
• Why Alvotech SA’s (ALVO) Stock Is Down 5.80%
• Why Caribou Biosciences Inc’s (CRBU) Stock Is Down 4.35%

AAII Disclaimer

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