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

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Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Nordstrom (JWN - Free Report) and Figs (FIGS - 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.

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.

Currently, Nordstrom has a Zacks Rank of #1 (Strong Buy), while Figs has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that JWN has an improving earnings outlook. But this is only part of the picture for value investors.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

JWN currently has a forward P/E ratio of 8.58, while FIGS has a forward P/E of 82.58. We also note that JWN has a PEG ratio of 1.43. 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. FIGS currently has a PEG ratio of 4.10.

Another notable valuation metric for JWN is its P/B ratio of 7.77. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FIGS has a P/B of 14.77.

These metrics, and several others, help JWN earn a Value grade of A, while FIGS has been given a Value grade of F.

JWN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that JWN is likely the superior value option right now.


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