AEO or IDEXY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of American Eagle Outfitters (AEO) and Industria de Diseno Textil SA (IDEXY). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
Currently, American Eagle Outfitters has a Zacks Rank of #1 (Strong Buy), while Industria de Diseno Textil SA has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AEO is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
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.
AEO currently has a forward P/E ratio of 15.11, while IDEXY has a forward P/E of 24.30. We also note that AEO has a PEG ratio of 1.21. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IDEXY currently has a PEG ratio of 1.88.
Another notable valuation metric for AEO is its P/B ratio of 2.94. 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, IDEXY has a P/B of 8.91.
These are just a few of the metrics contributing to AEO's Value grade of A and IDEXY's Value grade of C.
AEO has seen stronger estimate revision activity and sports more attractive valuation metrics than IDEXY, so it seems like value investors will conclude that AEO is the superior option right now.
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American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
Industria de Diseno Textil SA (IDEXY) : Free Stock Analysis Report
