CHS or SFIX: Which Is the Better Value Stock Right Now?
Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Chico's FAS (CHS) and Stitch Fix (SFIX). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Chico's FAS has a Zacks Rank of #2 (Buy), while Stitch Fix has a Zacks Rank of #3 (Hold). This means that CHS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
CHS currently has a forward P/E ratio of 12.24, while SFIX has a forward P/E of 183.75. We also note that CHS has a PEG ratio of 1.22. 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. SFIX currently has a PEG ratio of 8.17.
Another notable valuation metric for CHS is its P/B ratio of 1.47. 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 7.42.
These metrics, and several others, help CHS earn a Value grade of A, while SFIX has been given a Value grade of F.
CHS has seen stronger estimate revision activity and sports more attractive valuation metrics than SFIX, so it seems like value investors will conclude that CHS is the superior option right now.
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Chico's FAS, Inc. (CHS) : Free Stock Analysis Report
Stitch Fix, Inc. (SFIX) : Free Stock Analysis Report
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