Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Zumiez (ZUMZ) and Boot Barn (BOOT). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Zumiez has a Zacks Rank of #2 (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.
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.
ZUMZ currently has a forward P/E ratio of 13.14, while BOOT has a forward P/E of 22.71. We also note that ZUMZ has a PEG ratio of 0.97. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BOOT currently has a PEG ratio of 1.34.
Another notable valuation metric for ZUMZ is its P/B ratio of 1.62. 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, BOOT has a P/B of 3.67.
Based on these metrics and many more, ZUMZ holds a Value grade of B, while BOOT has a 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
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