Investors looking for stocks in the Retail - Apparel and Shoes sector might want to consider either Zumiez (ZUMZ) or Boot Barn (BOOT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Currently, Zumiez has a Zacks Rank of #1 (Strong Buy), while Boot Barn has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ZUMZ is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
ZUMZ currently has a forward P/E ratio of 13.01, while BOOT has a forward P/E of 23.21. We also note that ZUMZ has a PEG ratio of 0.96. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BOOT currently has a PEG ratio of 1.37.
Another notable valuation metric for ZUMZ is its P/B ratio of 1.61. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BOOT has a P/B of 3.76.
These are just a few of the metrics contributing to ZUMZ's Value grade of B and BOOT's Value grade of C.
ZUMZ stands above BOOT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ZUMZ is the superior value option right now.
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Zumiez Inc. (ZUMZ) : Free Stock Analysis Report
Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report
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