Investors looking for stocks in the Shoes and Retail Apparel sector might want to consider either Deckers (DECK) or Nike (NKE). 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 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, Deckers has a Zacks Rank of #1 (Strong Buy), while Nike has 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 DECK has an improving earnings outlook. However, value investors will care about much more than just this.
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.
DECK currently has a forward P/E ratio of 17.94, while NKE has a forward P/E of 32.63. We also note that DECK has a PEG ratio of 1.50. 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. NKE currently has a PEG ratio of 2.65.
Another notable valuation metric for DECK is its P/B ratio of 4.07. 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, NKE has a P/B of 15.52.
Based on these metrics and many more, DECK holds a Value grade of B, while NKE has a Value grade of D.
DECK has seen stronger estimate revision activity and sports more attractive valuation metrics than NKE, so it seems like value investors will conclude that DECK is the superior option right now.
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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
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