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GIII vs. UAA: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Textile - Apparel sector have probably already heard of G-III Apparel Group (GIII - Free Report) and Under Armour (UAA - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, G-III Apparel Group has a Zacks Rank of #1 (Strong Buy), while Under Armour has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GIII is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.

GIII currently has a forward P/E ratio of 9.36, while UAA has a forward P/E of 38.33. We also note that GIII has a PEG ratio of 1.16. 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. UAA currently has a PEG ratio of 1.38.

Another notable valuation metric for GIII is its P/B ratio of 1.04. 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, UAA has a P/B of 5.43.

These metrics, and several others, help GIII earn a Value grade of A, while UAA has been given a Value grade of D.

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

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G-III Apparel Group, LTD. (GIII) - free report >>

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