Investors with an interest in Leisure and Recreation Products stocks have likely encountered both Malibu Boats (MBUU) and Yeti (YETI). But which of these two companies is the best option for those looking for undervalued stocks? 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.
Malibu Boats has a Zacks Rank of #1 (Strong Buy), while Yeti has a Zacks Rank of #3 (Hold) right now. This means that MBUU'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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
MBUU currently has a forward P/E ratio of 9.67, while YETI has a forward P/E of 28.40. We also note that MBUU has a PEG ratio of 0.97. 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. YETI currently has a PEG ratio of 1.67.
Another notable valuation metric for MBUU is its P/B ratio of 4.39. 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, YETI has a P/B of 71.97.
Based on these metrics and many more, MBUU holds a Value grade of A, while YETI has a Value grade of D.
MBUU sticks out from YETI in both our Zacks Rank and Style Scores models, so value investors will likely feel that MBUU is the better option right now.
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Malibu Boats, Inc. (MBUU) : Free Stock Analysis Report
YETI Holdings, Inc. (YETI) : Free Stock Analysis Report
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