Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Boot Barn (BOOT - Free Report) and Canada Goose (GOOS - 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.
Boot Barn has a Zacks Rank of #1 (Strong Buy), while Canada Goose has a Zacks Rank of #2 (Buy) right now. This means that BOOT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
BOOT currently has a forward P/E ratio of 18.17, while GOOS has a forward P/E of 66.95. We also note that BOOT has a PEG ratio of 0.79. 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. GOOS currently has a PEG ratio of 2.14.
Another notable valuation metric for BOOT is its P/B ratio of 2.73. 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, GOOS has a P/B of 34.42.
These are just a few of the metrics contributing to BOOT's Value grade of B and GOOS's Value grade of F.
BOOT stands above GOOS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BOOT is the superior value option right now.