BURBY vs. FIGS: Which Stock Should Value Investors Buy Now?

BURBY FIGS

Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Burberry Group PLC (BURBY - Free Report) and Figs (FIGS - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Burberry Group PLC has a Zacks Rank of #2 (Buy), while Figs has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BURBY has an improving earnings outlook. 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.

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.

BURBY currently has a forward P/E ratio of 13.55, while FIGS has a forward P/E of 45.65. We also note that BURBY has a PEG ratio of 1.06. 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. FIGS currently has a PEG ratio of 21.04.

Another notable valuation metric for BURBY is its P/B ratio of 3.51. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FIGS has a P/B of 4.49.

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

BURBY sticks out from FIGS in both our Zacks Rank and Style Scores models, so value investors will likely feel that BURBY is the better option right now.

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