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DECK vs. NKE: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Shoes and Retail Apparel sector have probably already heard of Deckers (DECK - Free Report) and Nike (NKE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Deckers has a Zacks Rank of #2 (Buy), while Nike has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DECK is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

DECK currently has a forward P/E ratio of 17.90, while NKE has a forward P/E of 31. We also note that DECK has a PEG ratio of 1.68. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NKE currently has a PEG ratio of 2.38.

Another notable valuation metric for DECK is its P/B ratio of 4.22. 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 13.85.

These are just a few of the metrics contributing to DECK's Value grade of B and NKE's Value grade of D.

DECK has seen stronger estimate revision activity and sports more attractive valuation metrics than NKE, so it seems like value investors will conclude that DECK is the superior option right now.


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