SKX or NKE: Which Is the Better Value Stock Right Now?
Investors interested in Shoes and Retail Apparel stocks are likely familiar with Skechers (SKX) and Nike (NKE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Skechers has a Zacks Rank of #1 (Strong Buy), while Nike has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SKX has an improving earnings outlook. But this is only part of the picture 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 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.
SKX currently has a forward P/E ratio of 14.91, while NKE has a forward P/E of 27.52. We also note that SKX has a PEG ratio of 0.53. 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. NKE currently has a PEG ratio of 1.71.
Another notable valuation metric for SKX is its P/B ratio of 1.86. 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, NKE has a P/B of 11.24.
Based on these metrics and many more, SKX holds a Value grade of B, while NKE has a Value grade of D.
SKX stands above NKE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SKX is the superior value option right now.
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Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
