Investors with an interest in Retail - Miscellaneous stocks have likely encountered both Hibbett Sports (HIBB) and Ulta Beauty (ULTA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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, Hibbett Sports is sporting a Zacks Rank of #1 (Strong Buy), while Ulta Beauty has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that HIBB likely has seen a stronger improvement to its earnings outlook than ULTA has recently. But this is just one factor that value investors are interested in.
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.
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 10.40, while ULTA has a forward P/E of 20.44. We also note that HIBB has a PEG ratio of 0.96. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ULTA currently has a PEG ratio of 1.22.
Another notable valuation metric for HIBB is its P/B ratio of 1.19. 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, ULTA has a P/B of 7.82.
These metrics, and several others, help HIBB earn a Value grade of A, while ULTA has been given a Value grade of C.
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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