HIBB vs. ULTA: Which Stock Is the Better Value Option?
Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Hibbett Sports (HIBB) or Ulta Beauty (ULTA). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Hibbett Sports has a Zacks Rank of #2 (Buy), while Ulta Beauty has a Zacks Rank of #4 (Sell). 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
HIBB currently has a forward P/E ratio of 8.34, while ULTA has a forward P/E of 52.84. We also note that HIBB has a PEG ratio of 0.74. 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 4.17.
Another notable valuation metric for HIBB is its P/B ratio of 1.32. 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, ULTA has a P/B of 6.60.
These metrics, and several others, help HIBB earn a Value grade of A, while ULTA has been given a Value grade of C.
HIBB stands above ULTA 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
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
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