Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Zumiez (ZUMZ - Free Report) and Canada Goose (GOOS - 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Zumiez and Canada Goose are sporting Zacks Ranks of #1 (Strong Buy) and #5 (Strong Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ZUMZ has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 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.
ZUMZ currently has a forward P/E ratio of 10.86, while GOOS has a forward P/E of 26.51. We also note that ZUMZ has a PEG ratio of 0.90. 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 1.28.
Another notable valuation metric for ZUMZ is its P/B ratio of 1.74. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, GOOS has a P/B of 7.71.
Based on these metrics and many more, ZUMZ holds a Value grade of B, while GOOS has a Value grade of D.
ZUMZ stands above GOOS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ZUMZ is the superior value option right now.