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.

Latest Biotechnology & Medical Research Stock News

Before choosing which top Biotechnology & Medical Research stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The Biotechnology and Medical Research sub-industry has a positive outlook, a historically defensive sub-industry. Drug sales are anticipated to have high growth, primarily driven by COVID-19 therapeutics, the continued adoption of many new and innovative therapies, a favorable M&A environment, and a low prevalence of patent expirations in 2022. Additionally, companies could see prescription growth pick up as in-person physician visits return to pre-pandemic levels. As COVID-19 variants have emerged, vaccine boosters have been offered in order to increase efficacy. Due to this, repeat vaccinations will likely be necessary for lifelong immunity which would provide a long-lasting and significant source of revenue for lead vaccine developers. Aside from vaccines, the biotech industry is dependent on the volume of new therapy approvals. The FDA’s heavy focus on COVID-19 could slow the approvals on non-COVID-19 therapies. Despite this, the biotech industry will likely see promising sales growth over the next five years as it usually takes at least five years for new drugs to reach peak sales levels. Approval activity has also been on the rise recently. Mergers and acquisitions activity is expected to remain low as a more activist Federal Trade Commission (led by Lina Khan) could be more skeptical of proposed mergers. Year to date through June 30, the S&P 1500 Biotech Index was down 1.6%, vs. a 20.5% decline for the S&P 1500 Composite Index. In 2021, the Biotech Index rose 8.2%, vs. a 26.7% gain for the Composite Index.

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 Tuesday, March 28, 2023. 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.

Ayala Pharmaceuticals Inc’s Value Grade

Value Grade:

Ayala Pharmaceuticals, Inc. is a clinical-stage biotechnology company. The Company is focused on the development and commercialization of Listeria monocytogenes (Lm)- technology antigen delivery products based on a platform technology that utilizes live attenuated Lm, bioengineered to secrete antigen/adjuvant fusion proteins. Its Listeria-based immunotherapies are designed for antigen delivery through a process of insertion of multiple copies of the tLLO-fusion protein into each extrachromosomal protein expression and secretion plasmid that makes and secretes the target protein right Inside the patient?s antigen presenting cells to initiate and/or boost their immune response. It conducts clinical studies of Lm Technology immunotherapies in early prostate cancer. It identifies and works with collaborators and licensees for these programs and others for first-generation Lm immunotherapies, such as ADXS-HPV (AXAL) for HPV-associated cancer and ADXS-HER-2 for pediatric osteosarcoma.

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.

Ayala Pharmaceuticals Inc has a Value Score of 78, which is considered to be undervalued.

When you look at Ayala Pharmaceuticals Inc’s price-to-sales ratio at 9.52 compared to the industry median at 8.70, this company has a higher price relative to revenue compared to its peers. This could make Ayala Pharmaceuticals Inc’s stock less attractive for value investors.

Now, let’s assess Ayala Pharmaceuticals Inc’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. Ayala Pharmaceuticals Inc’s shareholder yield is higher than its industry median ratio of (5.68%). 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. Ayala Pharmaceuticals Inc’s price-to-book ratio is lower than its industry median ratio of 1.43. This could make Ayala Pharmaceuticals Inc more attractive to investors looking for a new addition to their portfolio.

Phenomex Inc’s Value Grade

Value Grade:

PhenomeX Inc., formerly Berkeley Lights, Inc., is a functional cell biology company. The Company enables scientists to leverage each cell and drive the next generation of functional cell biology that will advance human health. The Company enables scientists to reveal insights into cell function and obtain a full view of the behavior of each cell. Its specific suite of proven tools and services offers unparalleled resolution and speed the insights that are key to advancing discoveries that can completely improve the prevention and treatment of disease. The Company?s platforms are used by researchers across the globe, including various global pharmaceutical companies and approximately 85% of United States cancer centers.

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.

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

Phenomex Inc’s price-to-book ratio is higher than its peers. This could make Phenomex Inc less attractive for value investors when compared to the industry median at 1.43.

You can read more about Phenomex 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 clinical-stage microbiome therapeutics company. It is engaged in leveraging its Human-First Discovery platform to develop a class of orally administered biological drugs. Its Human-First Discovery platform uses reverse translation to identify diseases of dysbiosis and to design microbiome therapeutics that address them. Its lead product candidate, CP101, is an orally administered complete microbiome therapeutic in development for the prevention of recurrent Clostridioides difficile infection (CDI). CP101, consists of a microbial community harvested from rigorously screened healthy donors that is lyophilized and formulated in orally administered capsules designed to release at the appropriate location in the gastrointestinal tract. CP101 is designed to deliver a complete microbiome, addressing the community-level dysbiosis that characterizes CDI. Its product pipeline includes FIN-211, TAK-524, and FIN-525, as well as consortia product candidates.

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 70, 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 1.43.

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.

Lumos Pharma Inc’s Value Grade

Value Grade:

Lumos Pharma, Inc. is a clinical-stage biopharmaceutical company. The Company is engaged in advancing its clinical program and focused on identifying, acquiring, developing, and commercializing products and new therapies for people with rare diseases. Its pipeline is focused on the development of an orally administered small molecule, LUM-201, which is a growth hormone (GH) secretagogue, also called ibutamoren, for rare endocrine disorders that require injectable recombinant human growth hormone (rhGH). LUM-201 is a tablet formulation that is intended to be administered once daily. LUM-201 stimulates GH via the GH secretagogue receptor (GHSR1a), also known as the ghrelin receptor, and also suppresses the release of somatostatin, thus providing a differentiated mechanism of action to treat some rare endocrine disorders (involving a deficiency of GH) by increasing the amplitude of endogenous, pulsatile GH secretion. Lumos Pharma Sub, Inc. (Private Lumos) is its subsidiary.

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.

Lumos Pharma Inc has a Value Score of 65, which is considered to be undervalued.

Lumos Pharma Inc’s price-to-book ratio is higher than its peers. This could make Lumos Pharma Inc less attractive for value investors when compared to the industry median at 1.43.

You can read more about Lumos Pharma 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.

SenesTech Inc’s Value Grade

Value Grade:

SenesTech, Inc. is a rodent fertility control specialists, which is focused on to create a healthy environment by virtually eliminating rodent pest populations. Its product ContraPest, is a liquid bait containing the active ingredients 4-vinylcyclohexene diepoxide (VCD) and triptolide. ContraPest limits the reproduction of male and female rats beginning with the first breeding cycle following consumption. ContraPest is a highly palatable liquid formulation that reduces fertility in both male and female rats. Its technology is effective on rat species and its technology can be applied to other mammalian species. ContraPest has two active ingredients: VCD and triptolide. Triptolide, derived from the thunder god vine Tripterygium wilfordii, used in traditional Chinese medicines and other over-the-counter supplements. Triptolide affects the reproductive capacity of both male and female rats. VCD is an occupational chemical that selectively destroys ovarian follicles in rats.

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.

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

SenesTech Inc’s price-to-book ratio is higher than its peers. This could make SenesTech Inc less attractive for value investors when compared to the industry median at 1.43.

You can read more about SenesTech 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.

SQZ Biotechnologies Co’s Value Grade

Value Grade:

SQZ Biotechnologies Company is a clinical-stage biotechnology company focused on unlocking the full potential of cell therapies to benefit patients with cancer, autoimmune and infectious diseases, and other serious conditions. In oncology, it is developing cell therapy platforms that are based on directing tumor antigen-specific immune activation via engineered antigen presentation. It has three oncology candidates in clinical trials across its SQZ Antigen Presenting Cell (APC), SQZ enhanced APC (eAPC) and SQZ Activating Antigen Carrier (AAC), cell therapy platforms. In its autoimmune diseases portfolio, the Company is developing its SQZ Tolerizing Antigen Carrier (TAC), cell therapy platform to restore immune tolerance to self-antigens or other autoimmune disease-associated antigens that are central to disease pathogenesis. APC platform is focused on generating CD8+ T cell responses. SQZAPCs are created by ex vivo engineering of a patient's own peripheral blood mononuclear 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.

SQZ Biotechnologies Co has a Value Score of 86, which is considered to be undervalued.

SQZ Biotechnologies Co’s price-to-book ratio is higher than its peers. This could make SQZ Biotechnologies Co less attractive for value investors when compared to the industry median at 1.43.

You can read more about SQZ Biotechnologies Co’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.

XORTX Therapeutics Inc’s Value Grade

Value Grade:

XORTX Therapeutics Inc. is a pharmaceutical company. The Company is focused on identifying, developing and commercializing therapies to treat progressive kidney disease modulated by aberrant purine and uric acid metabolism in orphan (rare) disease indications, such as autosomal dominant polycystic kidney disease (ADPKD) and type 2 diabetic nephropathy (T2DN) as well as acute kidney injury (AKI) associated with coronavirus infection. Its three lead product candidates are XRx-008, for the treatment of ADPKD; XRx-101, to treat AKI associated with Coronavirus / COVID-19 infection, AKI and associated health consequences. In addition, XRx-225 is a pre-clinical stage program for type 2 diabetic nephropathy. It is working to advance its clinical development stage products that target aberrant purine metabolism and xanthine oxidase to decrease or inhibit production of uric acid. The Company is evaluating xanthine oxidase inhibitor candidates for the XRx-225 program to treat T2DN.

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.

XORTX Therapeutics Inc has a Value Score of 73, which is considered to be undervalued.

XORTX Therapeutics Inc’s price-earnings ratio is 2.1 compared to the industry median at 10.8. This means that it has a lower price relative to its earnings compared to its peers. This makes XORTX Therapeutics Inc more attractive for value investors.

XORTX Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make XORTX Therapeutics Inc less attractive for value investors when compared to the industry median at 1.43.

You can read more about XORTX 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.

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.

• Ayala Pharmaceuticals Inc stock has a Value Grade of B.
• Phenomex Inc stock has a Value Grade of B.
• Finch Therapeutics Group Inc stock has a Value Grade of B.
• Lumos Pharma Inc stock has a Value Grade of B.
• SenesTech Inc stock has a Value Grade of A.
• SQZ Biotechnologies Co stock has a Value Grade of A.
• XORTX Therapeutics 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 Tuesday, March 28
• Is Midatech Pharma PLC-ADR (BDRX) Stock a Good Investment?
• 6 Undervalued Biotechnology & Medical Research Stocks for Monday, March 27
• Why AVITA Medical Inc’s (RCEL) Stock Is Up 4.28%

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