HELE or ELF: Which Is the Better Value Stock Right Now?
Investors with an interest in Cosmetics stocks have likely encountered both Helen of Troy (HELE) and e.l.f. Beauty (ELF). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Right now, both Helen of Troy and e.l.f. Beauty are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
HELE currently has a forward P/E ratio of 13.20, while ELF has a forward P/E of 57.56. We also note that HELE has a PEG ratio of 1.65. 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. ELF currently has a PEG ratio of 2.66.
Another notable valuation metric for HELE is its P/B ratio of 1.86. 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, ELF has a P/B of 15.73.
These metrics, and several others, help HELE earn a Value grade of B, while ELF has been given a Value grade of F.
Both HELE and ELF are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HELE is the superior value option right now.
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Helen of Troy Limited (HELE) : Free Stock Analysis Report
e.l.f. Beauty (ELF) : Free Stock Analysis Report
