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HELE or ELF: Which Is the Better Value Stock Right Now?

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Investors with an interest in Cosmetics stocks have likely encountered both Helen of Troy (HELE - Free Report) and e.l.f. Beauty (ELF - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Helen of Troy and e.l.f. Beauty are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HELE 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 tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

HELE currently has a forward P/E ratio of 9.39, while ELF has a forward P/E of 49.65. We also note that HELE has a PEG ratio of 1.17. 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. ELF currently has a PEG ratio of 1.39.

Another notable valuation metric for HELE is its P/B ratio of 1.32. 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, ELF has a P/B of 15.82.

Based on these metrics and many more, HELE holds a Value grade of A, while ELF has a Value grade of F.

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


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