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

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Investors interested in Textile - Apparel stocks are likely familiar with G-III Apparel Group (GIII - Free Report) and Lululemon (LULU - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, G-III Apparel Group is sporting a Zacks Rank of #1 (Strong Buy), while Lululemon has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that GIII likely has seen a stronger improvement to its earnings outlook than LULU has recently. 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 6.77, while LULU has a forward P/E of 31.42. We also note that GIII has a PEG ratio of 0.45. 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. LULU currently has a PEG ratio of 1.57.

Another notable valuation metric for GIII is its P/B ratio of 0.64. 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, LULU has a P/B of 14.32.

These are just a few of the metrics contributing to GIII's Value grade of A and LULU's Value grade of D.

GIII 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 GIII is likely the superior value option right now.


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lululemon athletica inc. (LULU) - free report >>

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

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