HELE vs. ELF: Which Stock Is the Better Value Option?
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.
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.
Currently, both Helen of Troy and e.l.f. Beauty are holding 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.
HELE currently has a forward P/E ratio of 13.08, while ELF has a forward P/E of 44.75. We also note that HELE has a PEG ratio of 1.63. 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 2.06.
Another notable valuation metric for HELE is its P/B ratio of 1.84. 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, ELF has a P/B of 12.24.
These are just a few of the metrics contributing to HELE's Value grade of B and ELF's 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
