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GCO vs. SFIX: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Genesco (GCO - Free Report) and Stitch Fix (SFIX - 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Genesco and Stitch Fix are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GCO is likely seeing its earnings outlook improve to a greater extent. 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.

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.

GCO currently has a forward P/E ratio of 10.24, while SFIX has a forward P/E of 314.17. We also note that GCO has a PEG ratio of 2.05. 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. SFIX currently has a PEG ratio of 20.94.

Another notable valuation metric for GCO is its P/B ratio of 1.12. 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, SFIX has a P/B of 5.73.

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

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


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Genesco Inc. (GCO) - free report >>

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