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AEO or BURBY: Which Is the Better Value Stock Right Now?
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Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both American Eagle Outfitters (AEO - Free Report) and Burberry Group PLC (BURBY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, American Eagle Outfitters is sporting a Zacks Rank of #2 (Buy), while Burberry Group PLC has a Zacks Rank of #3 (Hold). This means that AEO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
AEO currently has a forward P/E ratio of 11.64, while BURBY has a forward P/E of 19.75. We also note that AEO has a PEG ratio of 0.92. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BURBY currently has a PEG ratio of 1.55.
Another notable valuation metric for AEO is its P/B ratio of 1.54. 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, BURBY has a P/B of 5.71.
These are just a few of the metrics contributing to AEO's Value grade of A and BURBY's Value grade of C.
AEO stands above BURBY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AEO is the superior value option right now.
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AEO or BURBY: Which Is the Better Value Stock Right Now?
Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both American Eagle Outfitters (AEO - Free Report) and Burberry Group PLC (BURBY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, American Eagle Outfitters is sporting a Zacks Rank of #2 (Buy), while Burberry Group PLC has a Zacks Rank of #3 (Hold). This means that AEO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
AEO currently has a forward P/E ratio of 11.64, while BURBY has a forward P/E of 19.75. We also note that AEO has a PEG ratio of 0.92. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BURBY currently has a PEG ratio of 1.55.
Another notable valuation metric for AEO is its P/B ratio of 1.54. 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, BURBY has a P/B of 5.71.
These are just a few of the metrics contributing to AEO's Value grade of A and BURBY's Value grade of C.
AEO stands above BURBY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AEO is the superior value option right now.