CRI or SHOO: Which Is the Better Value Stock Right Now?
Investors with an interest in Shoes and Retail Apparel stocks have likely encountered both Carter's (CRI) and Steven Madden (SHOO). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both Carter's and Steven Madden are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
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.
CRI currently has a forward P/E ratio of 17.21, while SHOO has a forward P/E of 25.90. We also note that CRI has a PEG ratio of 0.81. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SHOO currently has a PEG ratio of 1.73.
Another notable valuation metric for CRI is its P/B ratio of 4.43. 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, SHOO has a P/B of 4.49.
Based on these metrics and many more, CRI holds a Value grade of B, while SHOO has a Value grade of D.
Both CRI and SHOO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CRI is the superior value option right now.
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Carters, Inc. (CRI) : Free Stock Analysis Report
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