LOVE vs. FBIN: Which Stock Is the Better Value Option?
Investors interested in stocks from the Retail - Home Furnishings sector have probably already heard of Lovesac (LOVE) and Fortune Brands Innovations (FBIN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, both Lovesac and Fortune Brands Innovations 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. But this is only part of the picture for value investors.
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.
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.
LOVE currently has a forward P/E ratio of 15.05, while FBIN has a forward P/E of 19.39. We also note that LOVE has a PEG ratio of 0.43. 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. FBIN currently has a PEG ratio of 6.57.
Another notable valuation metric for LOVE is its P/B ratio of 2.27. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FBIN has a P/B of 4.51.
These are just a few of the metrics contributing to LOVE's Value grade of A and FBIN's Value grade of C.
Both LOVE and FBIN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LOVE is the superior value option right now.
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The Lovesac Company (LOVE) : Free Stock Analysis Report
Fortune Brands Innovations, Inc. (FBIN) : Free Stock Analysis Report
