Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 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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5 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 5 undervalued stocks in the Biotechnology & Medical Research industry for Thursday, May 09, 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 83, which is considered to be undervalued.

When you look at AEterna Zentaris Inc. (USA)’s price-to-sales ratio at 2.11 compared to the industry median at 8.50, 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 1.2, 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 (12.14%). 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 2.05. This could make AEterna Zentaris Inc. (USA) more attractive to investors looking for a new addition to their portfolio.

Aptevo Therapeutics Inc’s Value Grade

Value Grade:

Aptevo Therapeutics Inc. is a clinical-stage biotechnology company. It is focused on developing novel immunotherapy candidates for the treatment of different forms of cancer. It has developed two versatile and enabling platform technologies for rational design of precision immune modulatory drugs. Its lead clinical candidates, APVO436 and ALG.APV-527, and preclinical candidates, APVO603 and APVO711, are developed using its ADAPTIR modular protein technology platform. Its preclinical candidate APVO442 is developed using its ADAPTIR-FLEX modular protein technology platform. APVO436 is a bispecific ADAPTIR that is designed to engage CD3 and CD123 to redirect T-cells to destroy leukemia cells expressing the target CD123 molecule on their surface. ALG.APV-527 is a novel investigational bispecific ADAPTIR candidate. APVO603 is a preclinical dual agonist bispecific ADAPTIR candidate designed to simultaneously target 4-1BB (CD137) and OX40 (CD134), both members of the TNF-receptor family.

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.

Aptevo Therapeutics Inc has a Value Score of 77, which is considered to be undervalued.

Aptevo Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make Aptevo Therapeutics Inc less attractive for value investors when compared to the industry median at 2.05.

You can read more about Aptevo 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.

IO Biotech Inc’s Value Grade

Value Grade:

IO Biotech Inc is a clinical-stage biopharmaceutical company developing immune-modulating cancer therapies based on T-win technology platform. The Company’s product candidates are designed to induce the immune system to simultaneously target and disrupt multiple pathways that regulate tumor-induced immunosuppression. IO Biotech’s lead product candidate, IO102-IO103, is designed to target the immunosuppressive mechanisms mediated by key immunosuppressive proteins such as IDO and PD-L1. The Company develops a pipeline of product candidates that leverage its T-win technology platform to address targets within the TME. The Company is spin-off of National Cancer for Center Immune Therapy at Herlev University Hospital in Denmark.

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.

IO Biotech Inc has a Value Score of 67, which is considered to be undervalued.

IO Biotech Inc’s price-to-book ratio is higher than its peers. This could make IO Biotech Inc less attractive for value investors when compared to the industry median at 2.05.

You can read more about IO Biotech 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.

Revelation Biosciences Inc’s Value Grade

Value Grade:

Revelation Biosciences, Inc. is a clinical-stage life sciences company engaged in the development of innate immune system therapeutics and diagnostics. Its therapeutic candidates are based on its Gemini formulation of active ingredient phosphorylated hexaacyl disaccharide (PHAD), a synthetic version of monophosphoryl lipid A (MPLA) that is known to stimulate Toll-like receptor 4 (TLR-4). Its product candidates include Gemini-SSI, which is being developed for the prevention and treatment of surgical sit infection; Gemini-AKI, which is being developed as a potential therapy for the prevention and treatment of acute kidney injury as a result of cardiac surgery; and Gemini-CKD, which is being developed as a potential therapy for the prevention and treatment of chronic kidney disease. Stimulation of TLR4 via Gemini leads to a controlled production of varied cytokines and chemokines which modulate the activity of the innate and adaptive immune response, relative to Lipopolysaccharides (LPS).

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.

Revelation Biosciences Inc has a Value Score of 74, which is considered to be undervalued.

Revelation Biosciences Inc’s price-to-book ratio is higher than its peers. This could make Revelation Biosciences Inc less attractive for value investors when compared to the industry median at 2.05.

You can read more about Revelation 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.

Virpax Pharmaceuticals Inc’s Value Grade

Value Grade:

Virpax Pharmaceuticals, Inc. is a preclinical-stage pharmaceutical company. The Company is focused on developing novel and proprietary drug delivery systems across various pain indication. Its drug-delivery systems and drug-releasing technologies being developed are focused on advancing non-opioid and non-addictive pain management treatments and treatments for central nervous system (CNS) disorders to enhance patients’ quality of life. Its portfolio consists of multiple preclinical stage product candidates: Epoladerm, Probudur, Envelta, AnQlar and NobrXiol. Probudur is a single injection liposomal bupivacaine formulation being developed to manage post-operative pain. Envelta is an intranasal molecular envelope enkephalin formulation being developed to manage acute and chronic pain, including pain associated with cancer. The NobrXiol is being developed for the nasal delivery of a pharmaceutical-grade cannabidiol (CBD) for the management of rare pediatric epilepsy.

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.

Virpax Pharmaceuticals Inc has a Value Score of 84, which is considered to be undervalued.

Virpax Pharmaceuticals Inc’s price-to-book ratio is higher than its peers. This could make Virpax Pharmaceuticals Inc less attractive for value investors when compared to the industry median at 2.05.

You can read more about Virpax 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.

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 5 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.
• Aptevo Therapeutics Inc stock has a Value Grade of B.
• IO Biotech Inc stock has a Value Grade of B.
• Revelation Biosciences Inc stock has a Value Grade of B.
• Virpax Pharmaceuticals Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 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.

• 5 Undervalued Biotechnology & Medical Research Stocks for Thursday, May 09
• 5 Undervalued Biotechnology & Medical Research Stocks for Wednesday, May 08
• What You Need to Know About ACADIA Pharmaceuticals Inc's Q1 Earnings
• What You Need to Know About Alector Inc's Q1 Earnings

AAII Disclaimer

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