KROS vs. ARGX: Evaluating the Better Value Stock in a High-Risk Biotech Landscape

The biotechnology sector, long a haven for high-risk, high-reward investments, has seen renewed scrutiny as investors seek value amid volatile markets. Two companies at the forefront of this debate are Keros Therapeutics (KROS) and argenx SE (ARGX). While both operate in the competitive biotech space, their financial profiles diverge sharply when analyzed through the lens of value investing metrics and earnings momentum. This article examines which stock offers a more compelling value proposition.

Valuation Metrics: KROS Emerges as the Cheaper Option

Value investing hinges on identifying stocks trading below intrinsic value, often signaled by low price-to-earnings (P/E) and price-to-book (P/B) ratios. KROS's forward P/E ratio of 9.63 is a stark contrast to ARGX's 50.51, suggesting KROS is significantly undervalued relative to its earnings potential. Similarly, KROS's P/B ratio of 0.94-compared to ARGX's 8.93-indicates that its market price is closer to its tangible asset base, a hallmark of value stocks.

The PEG ratio, which adjusts for growth expectations, further tilts the balance. KROS's PEG of 0.26 implies the market is discounting its future earnings at an unusually steep rate, even as the stock outperforms estimates. By comparison, ARGX's PEG of 0.89 suggests it is fairly valued, but not at a discount according to market data. These metrics position KROS as a classic value play, while ARGX appears more aligned with growth-oriented investors.

Earnings Momentum: Divergent Trajectories

Earnings growth is a critical driver of long-term value. ARGX has delivered robust results, with annual earnings growth of 52.7% over five years and a projected 246.65% surge in earnings per share (EPS) for the next year. Its Q3 2025 EPS of $4.40 exceeded the Zacks Consensus Estimate of $4.37, underscoring strong execution.

KROS, however, tells a more nuanced story. While its five-year EPS growth averages 28.8%, the past year saw a 129.56% increase according to fundamental analysis. More recently, the company has shown explosive momentum, with quarterly EPS growth accelerating from 14.9% to 399.2% in two quarters. In Q3 2025, KROS reported an EPS of -$0.18-better than the estimated -$1.14-reflecting an 84.14% positive surprise. This volatility is typical of biotech firms but highlights KROS's potential for rapid turnaround.

Debt Profiles: KROS's Conservative Leverage

Biotech companies often rely on debt to fund R&D, but excessive leverage can amplify risk. KROS's debt-to-equity ratio of 0.0248 indicates minimal reliance on debt, with equity financing dominating its capital structure. For ARGX, data is less clear: recent reports cite a debt-to-equity ratio of 0.71%, while historical averages hover around 0.5%. Though both firms maintain conservative leverage, KROS's near-zero debt profile offers a margin of safety in a sector prone to clinical trial setbacks.

Conclusion: KROS as the Better Value Bet

While ARGX dazzles with high-growth potential, its elevated valuation metrics make it less appealing to value investors. KROS, by contrast, combines dirt-cheap valuations, improving earnings momentum, and negligible debt to form a compelling case for undervaluation. Its recent outperformance of estimates-despite a negative EPS-suggests resilience and operational efficiency.

That said, biotech investing remains inherently risky. KROS's path to profitability is not guaranteed, and its low valuations may reflect market skepticism about its pipeline. Investors must weigh these risks against the potential for outsized returns if the company can sustain its earnings momentum. For those prioritizing value over growth, however, KROS emerges as the more attractive option in this high-stakes matchup.