CROX or LULU: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Textile - Apparel sector have probably already heard of Crocs (CROX) and Lululemon (LULU). 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 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.
Crocs has a Zacks Rank of #1 (Strong Buy), while Lululemon has a Zacks Rank of #3 (Hold) right now. This means that CROX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CROX currently has a forward P/E ratio of 18.77, while LULU has a forward P/E of 75.26. We also note that CROX has a PEG ratio of 1.25. 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. LULU currently has a PEG ratio of 4.11.
Another notable valuation metric for CROX is its P/B ratio of 15.76. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, LULU has a P/B of 23.30.
Based on these metrics and many more, CROX holds a Value grade of B, while LULU has a Value grade of F.
CROX is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CROX is likely the superior value option right now.
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Crocs, Inc. (CROX) : Free Stock Analysis Report
lululemon athletica inc. (LULU) : Free Stock Analysis Report
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