Investors with an interest in Retail - Miscellaneous stocks have likely encountered both Hibbett Sports (HIBB - Free Report) and Five Below (FIVE - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Hibbett Sports has a Zacks Rank of #1 (Strong Buy), while Five Below has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HIBB is likely seeing its earnings outlook improve to a greater extent. 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 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.
HIBB currently has a forward P/E ratio of 8.85, while FIVE has a forward P/E of 70.57. We also note that HIBB has a PEG ratio of 0.64. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FIVE currently has a PEG ratio of 3.62.
Another notable valuation metric for HIBB is its P/B ratio of 1.84. 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, FIVE has a P/B of 10.21.
Based on these metrics and many more, HIBB holds a Value grade of A, while FIVE has a Value grade of D.
HIBB stands above FIVE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HIBB is the superior value option right now.