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FL or SFIX: Which Is the Better Value Stock Right Now?

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Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both Foot Locker (FL - Free Report) and Stitch Fix (SFIX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, both Foot Locker and Stitch Fix are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

FL currently has a forward P/E ratio of 10.40, while SFIX has a forward P/E of 152.16. We also note that FL has a PEG ratio of 1.58. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SFIX currently has a PEG ratio of 10.14.

Another notable valuation metric for FL is its P/B ratio of 2.25. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SFIX has a P/B of 9.85.

These are just a few of the metrics contributing to FL's Value grade of A and SFIX's Value grade of D.

Both FL and SFIX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FL is the superior value option right now.


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