The shares of Prudential Financial, Inc. (NYSE:PRU) and Exact Sciences Corporation (NASDAQ:EXAS) were among the active stocks of the last trading sessions. Prudential Financial, Inc. (NYSE:PRU) soared to 1.46% closing at the price of $105.99 whereas the shares of Exact Sciences Corporation (NASDAQ:EXAS) declined -3.75% with the decrease of -2.67 points closing at the price of $68.45. Prudential Financial, Inc. has currently increase 1.23% in its stock over the period of 6-months while its rival Exact Sciences Corporation added 66.3% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Prudential Financial, Inc. (NYSE:PRU) is 6.8% while the ROI of Exact Sciences Corporation (NASDAQ:EXAS) is -46.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PRU’s EBITDA Margin is 6.37 whereas EXAS’s is -79.96.
Both the profitability ratios suggest that Prudential Financial, Inc. (NYSE:PRU) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Prudential Financial, Inc. (NYSE:PRU) reported $3.01/share EPS for the previous quarter where analysts were predicting an EPS to be $3.07/share Thus lagging the analyst Estimates with a Surprise Factor of -2 Percent. While, Exact Sciences Corporation (NASDAQ:EXAS) reported EPS of $-0.3/share in the last quarter. The analysts projected EPS of $-0.32/share depicting a Surprise of 6.3 Percent.
Taking a look at Earnings per Share, Exact Sciences Corporation tends to be beating the analyst estimates more than Prudential Financial, Inc.. so EXAS is more profitable than PRU.
Technical Analysis of Prudential Financial, Inc. & Exact Sciences Corporation
Moving average convergence divergence (MACD) shows that Prudential Financial, Inc. (NYSE:PRU) is on a PRICE RELATIVITY trend While Exact Sciences Corporation (NASDAQ:EXAS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Prudential Financial, Inc. was in BULLISH territory and Exact Sciences Corporation was in BEARISH territory.
PRU’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While EXAS’s candle is BEARISH with HIGH.
EPS Growth Rate: PRU’s 9% versus EXAS’s 20%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Prudential Financial, Inc. (NYSE:PRU) is predicted at 9% while Exact Sciences Corporation (NASDAQ:EXAS) stands at 20%. These numbers suggest that EXAS is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of PRU stands at 0 while EXAS is at 15.8 whereas the debt ratio of the prior is 0.41 while the debt ratio of the later is 0.88.
The values of the both ratios suggest that EXAS is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.2 for PRU and 1.8 for EXAS which means PRU has Hold rating whereas EXAS has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for PRU is $119.47 which is 11.28% of its current price while EXAS has price target of 84.7 which is 19.19% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
PRU currently has price to earning P/E ratio of 10.01 whereas EXAS has 0 while the forward P/E ratio for the prior stands at 8.18 and for the later it depicts the value of 0.
The price to Book P/B for PRU is 0.92, Price to Sale is at 0.72 and for EXAS these ratios stand at 11.22 and 24.23.