Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 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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3 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 3 undervalued stocks in the Biotechnology & Medical Research industry for Monday, September 25, 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.

BioNTech SE - ADR’s Value Grade

Value Grade:

BioNTech SE is a Germany-based clinical-stage biotechnology company. The Company focuses on patient-specific immunotherapies for the treatment of cancer and other serious diseases. The Company is providing technologies including mRNA-based therapies, cell therapies, small molecules and antibodies, which can be utilized for specific purposes or can be even combined with each other in a synergistic manner. It also develops a broad product pipeline using different scientific approaches and technology platforms, including individualized mRNA-based product candidates, chimeric antigen receptor T-cells, checkpoint immunomodulators, targeted cancer antibodies and small molecules. In addition, the Company offers diagnostic products and drug discovery services for other therapeutic areas, including infectious diseases, allergies and autoimmune 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.

BioNTech SE - ADR has a Value Score of 87, which is considered to be undervalued.

When you look at BioNTech SE - ADR’s price-to-sales ratio at 2.58 compared to the industry median at 7.53, this company has a lower price relative to revenue compared to its peers. This could make BioNTech SE - ADR’s stock more attractive for value investors.

BioNTech SE - ADR’s price-earnings ratio is 5.59 compared to the industry median at 20.37. This means it has a lower share price relative to earnings compared to its peers. This could make BioNTech SE - ADR more attractive for value investors.

Now, let’s assess BioNTech SE - ADR’s EV/EBITDA ratio, also known as enterprise multiple. At 1.7, when compared to the industry median of 0.8, 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. BioNTech SE - ADR’s shareholder yield is higher than its industry median ratio of (7.19%). 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. BioNTech SE - ADR’s price-to-book ratio is lower than its industry median ratio of 1.41. This could make BioNTech SE - ADR more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at BioNTech SE - ADR’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. BioNTech SE - ADR’s price-to-free-cash-flow ratio is lower than its industry median ratio of 20.12. This could make BioNTech SE - ADR more attractive because the lower P/FCF ratio indicates that BioNTech SE - ADR is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Theriva Biologics Inc’s Value Grade

Value Grade:

Theriva Biologics, Inc. is a diversified clinical-stage company developing therapeutics designed to treat cancer and related diseases in areas of high unmet need. The Company is advancing a new oncolytic adenovirus platform designed for intravenous (IV), intravitreal and antitumoral delivery to trigger tumor cell death, improve access of co-administered cancer therapies to the tumor, and promote a robust and sustained anti-tumor response by the patients immune system. The Company?s lead candidates are: VCN-01, an oncolytic adenovirus designed to replicate selectively and aggressively within tumor cells, and to degrade the tumor stroma barrier; SYN-004 (ribaxamase) which is designed to degrade used IV beta-lactam antibiotics within the gastrointestinal (GI) tract to prevent microbiome damage, and SYN-020, a recombinant oral formulation of the enzyme intestinal alkaline phosphatase (IAP) produced under cGMP conditions and intended to treat both local GI and systemic diseases.

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.

Theriva Biologics Inc has a Value Score of 99, which is considered to be undervalued.

Theriva Biologics Inc’s price-to-book ratio is higher than its peers. This could make Theriva Biologics Inc less attractive for value investors when compared to the industry median at 1.41.

You can read more about Theriva Biologics 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.

Vaccitech PLC - ADR’s Value Grade

Value Grade:

Vaccitech plc is a clinical-stage biopharmaceutical company. The Company is engaged in the discovery and development of immunotherapeutics and vaccines for the treatment and prevention of infectious diseases, cancer, and autoimmunity. It uses its platform to develop product candidates that target immune responses against pathogens and tumor cells. It has a pipeline of both clinical and preclinical-stage therapeutic and prophylactic programs. Its therapeutic programs include VTP-300 for the treatment of chronic hepatitis B infection (CHB); VTP-200 for the treatment of human papilloma virus infection (HPV); VTP-850 for the treatment of prostate cancer; VTP-600 for the treatment of non-small cell lung cancer (NSCLC); VTP-1000 for the treatment of celiac disease, and VTP-1100 for the treatment of HPV-associated cancers. Its prophylactic programs include VTP-400 for the prevention of herpes zoster or shingles, and VTP-500 for the prevention of Middle East respiratory syndrome (MERS).

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.

Vaccitech PLC - ADR has a Value Score of 65, which is considered to be undervalued.

Vaccitech PLC - ADR’s price-to-book ratio is higher than its peers. This could make Vaccitech PLC - ADR less attractive for value investors when compared to the industry median at 1.41.

You can read more about Vaccitech 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.

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 3 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.

• BioNTech SE - ADR stock has a Value Grade of A.
• Theriva Biologics Inc stock has a Value Grade of A.
• Vaccitech PLC - ADR stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 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.

• 3 Undervalued Biotechnology & Medical Research Stocks for Monday, September 25
• 6 Undervalued Biotechnology & Medical Research Stocks for Friday, September 22
• Why Alector Inc’s (ALEC) Stock Is Up 14.10%
• Why Ambrx Biopharma Inc - ADR’s (AMAM) Stock Is Down 4.39%

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