Investors interested in Retail - Miscellaneous stocks are likely familiar with Hibbett Sports (HIBB) and KAR Auction Services (KAR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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 KAR Auction Services 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 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.
HIBB currently has a forward P/E ratio of 10.93, while KAR has a forward P/E of 19.37. We also note that HIBB has a PEG ratio of 1.68. 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. KAR currently has a PEG ratio of 2.01.
Another notable valuation metric for HIBB is its P/B ratio of 1.16. 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, KAR has a P/B of 5.04.
Based on these metrics and many more, HIBB holds a Value grade of A, while KAR has a Value grade of C.
HIBB stands above KAR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HIBB is the superior value option right now.
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Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
KAR Auction Services, Inc (KAR) : Free Stock Analysis Report
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