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

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Investors with an interest in Textile - Apparel stocks have likely encountered both Crocs (CROX - Free Report) and Lululemon (LULU - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Crocs and Lululemon are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that CROX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.

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.

CROX currently has a forward P/E ratio of 10.23, while LULU has a forward P/E of 31.88. We also note that CROX has a PEG ratio of 1.58. 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. LULU currently has a PEG ratio of 1.59.

Another notable valuation metric for CROX is its P/B ratio of 5.28. 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, LULU has a P/B of 16.39.

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

CROX 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 CROX is likely the superior value option right now.


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

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