Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Hibbett Sports (HIBB) or Five Below (FIVE). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Hibbett Sports is sporting a Zacks Rank of #1 (Strong Buy), while Five Below has a Zacks Rank of #3 (Hold). This means that HIBB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.
HIBB currently has a forward P/E ratio of 7.55, while FIVE has a forward P/E of 36.24. We also note that HIBB has a PEG ratio of 1.16. 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. FIVE currently has a PEG ratio of 1.41.
Another notable valuation metric for HIBB is its P/B ratio of 0.87. 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, FIVE has a P/B of 10.10.
These metrics, and several others, help HIBB earn a Value grade of A, while FIVE has been given a Value grade of D.
HIBB 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 HIBB is likely the superior value option right now.
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Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
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