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.
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.
Crocs and Lululemon are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CROX has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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 12.28, while LULU has a forward P/E of 28.22. We also note that CROX has a PEG ratio of 0.82. 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. LULU currently has a PEG ratio of 1.41.
Another notable valuation metric for CROX is its P/B ratio of 9.92. 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, LULU has a P/B of 13.44.
These metrics, and several others, help CROX earn a Value grade of A, while LULU has been given a Value grade of D.
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
