SKX vs. BIRK: Which Stock Is the Better Value Option?

Investors interested in stocks from the Shoes and Retail Apparel sector have probably already heard of Skechers (SKX) and Birkenstock (BIRK). But which of these two stocks presents investors with the better value opportunity right now? 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 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, Skechers has a Zacks Rank of #2 (Buy), while Birkenstock has a Zacks Rank of #3 (Hold). This means that SKX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

SKX currently has a forward P/E ratio of 16.45, while BIRK has a forward P/E of 34.51. We also note that SKX has a PEG ratio of 1.17. 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. BIRK currently has a PEG ratio of 1.58.

Another notable valuation metric for SKX is its P/B ratio of 2.23. 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, BIRK has a P/B of 3.27.

These are just a few of the metrics contributing to SKX's Value grade of B and BIRK's Value grade of F.

SKX has seen stronger estimate revision activity and sports more attractive valuation metrics than BIRK, so it seems like value investors will conclude that SKX is the superior option right now.

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Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report

Birkenstock Holding PLC (BIRK) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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