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SKX vs. NKE: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Shoes and Retail Apparel sector have probably already heard of Skechers (SKX - Free Report) and Nike (NKE - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Skechers is sporting a Zacks Rank of #2 (Buy), while Nike has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that SKX likely has seen a stronger improvement to its earnings outlook than NKE has recently. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SKX currently has a forward P/E ratio of 14.20, while NKE has a forward P/E of 27.47. We also note that SKX has a PEG ratio of 2.03. 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. NKE currently has a PEG ratio of 2.25.
Another notable valuation metric for SKX is its P/B ratio of 1.88. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NKE has a P/B of 12.74.
These are just a few of the metrics contributing to SKX's Value grade of B and NKE's Value grade of F.
SKX stands above NKE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SKX is the superior value option right now.
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SKX vs. NKE: Which Stock Is the Better Value Option?
Investors interested in stocks from the Shoes and Retail Apparel sector have probably already heard of Skechers (SKX - Free Report) and Nike (NKE - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Skechers is sporting a Zacks Rank of #2 (Buy), while Nike has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that SKX likely has seen a stronger improvement to its earnings outlook than NKE has recently. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SKX currently has a forward P/E ratio of 14.20, while NKE has a forward P/E of 27.47. We also note that SKX has a PEG ratio of 2.03. 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. NKE currently has a PEG ratio of 2.25.
Another notable valuation metric for SKX is its P/B ratio of 1.88. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NKE has a P/B of 12.74.
These are just a few of the metrics contributing to SKX's Value grade of B and NKE's Value grade of F.
SKX stands above NKE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SKX is the superior value option right now.