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PII vs. FOXF: Which Stock Should Value Investors Buy Now?

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Investors interested in Automotive - Domestic stocks are likely familiar with Polaris Inc (PII - Free Report) and Fox Factory Holding (FOXF - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Polaris Inc has a Zacks Rank of #2 (Buy), while Fox Factory Holding has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PII has 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.

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.

PII currently has a forward P/E ratio of 13.58, while FOXF has a forward P/E of 23.43. We also note that PII has a PEG ratio of 1.13. 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. FOXF currently has a PEG ratio of 1.42.

Another notable valuation metric for PII is its P/B ratio of 5.22. 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, FOXF has a P/B of 6.63.

These metrics, and several others, help PII earn a Value grade of B, while FOXF has been given a Value grade of D.

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


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