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PRTY vs. LUXTY: Which Stock Is the Better Value Option?

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Investors with an interest in Consumer Products - Discretionary stocks have likely encountered both Party City and Luxottica . 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both Party City and Luxottica are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

PRTY currently has a forward P/E ratio of 7.45, while LUXTY has a forward P/E of 29.42. We also note that PRTY has a PEG ratio of 0.34. 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. LUXTY currently has a PEG ratio of 5.81.

Another notable valuation metric for PRTY is its P/B ratio of 1.33. 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, LUXTY has a P/B of 4.68.

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

Both PRTY and LUXTY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PRTY is the superior value option right now.