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HOG vs. FOXF: Which Stock Is the Better Value Option?

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Zacks Equity Research
·2 min read
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Investors with an interest in Automotive - Domestic stocks have likely encountered both Harley-Davidson (HOG) and Fox Factory Holding (FOXF). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, both Harley-Davidson and Fox Factory Holding are sporting a Zacks Rank of # 1 (Strong 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. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

HOG currently has a forward P/E ratio of 13.77, while FOXF has a forward P/E of 34.38. We also note that HOG has a PEG ratio of 2.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FOXF currently has a PEG ratio of 2.61.

Another notable valuation metric for HOG is its P/B ratio of 3.35. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FOXF has a P/B of 7.21.

These are just a few of the metrics contributing to HOG's Value grade of B and FOXF's Value grade of F.

Both HOG and FOXF are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HOG is the superior value option right now.


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HarleyDavidson, Inc. (HOG) : Free Stock Analysis Report
 
Fox Factory Holding Corp. (FOXF) : Free Stock Analysis Report
 
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Zacks Investment Research