U.S. Markets close in 5 hrs 37 mins
  • S&P 500

    3,679.05
    -65.47 (-1.75%)
     
  • Dow 30

    29,532.58
    -394.36 (-1.32%)
     
  • Nasdaq

    10,810.01
    -263.30 (-2.38%)
     
  • Russell 2000

    1,713.75
    -38.76 (-2.21%)
     
  • Crude Oil

    90.33
    +1.88 (+2.13%)
     
  • Gold

    1,703.70
    -17.10 (-0.99%)
     
  • Silver

    20.20
    -0.46 (-2.23%)
     
  • EUR/USD

    0.9775
    -0.0020 (-0.2053%)
     
  • 10-Yr Bond

    3.9020
    +0.0760 (+1.99%)
     
  • Vix

    31.31
    +0.79 (+2.59%)
     
  • GBP/USD

    1.1122
    -0.0046 (-0.4126%)
     
  • USD/JPY

    145.1340
    +0.0660 (+0.0455%)
     
  • BTC-USD

    19,661.03
    -344.74 (-1.72%)
     
  • CMC Crypto 200

    448.04
    -6.99 (-1.54%)
     
  • FTSE 100

    6,969.99
    -27.28 (-0.39%)
     
  • Nikkei 225

    27,116.11
    -195.19 (-0.71%)
     

COLM or LULU: Which Is the Better Value Stock Right Now?

·2 min read

Investors interested in Textile - Apparel stocks are likely familiar with Columbia Sportswear (COLM) and Lululemon (LULU). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Columbia Sportswear has a Zacks Rank of #2 (Buy), while Lululemon has a Zacks Rank of #3 (Hold). This means that COLM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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.

COLM currently has a forward P/E ratio of 15.94, while LULU has a forward P/E of 36.66. We also note that COLM has a PEG ratio of 1.77. 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. LULU currently has a PEG ratio of 1.83.

Another notable valuation metric for COLM is its P/B ratio of 3.01. 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, LULU has a P/B of 16.14.

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

COLM sticks out from LULU in both our Zacks Rank and Style Scores models, so value investors will likely feel that COLM is the better option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Columbia Sportswear Company (COLM) : Free Stock Analysis Report
 
lululemon athletica inc. (LULU) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research