TLYS vs. SFIX: Which Stock Is the Better Value Option?
Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Tilly's (TLYS) and Stitch Fix (SFIX). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Tilly's has a Zacks Rank of #2 (Buy), while Stitch Fix 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 TLYS 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 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
TLYS currently has a forward P/E ratio of 11.44, while SFIX has a forward P/E of 69.52. We also note that TLYS has a PEG ratio of 1.04. 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. SFIX currently has a PEG ratio of 2.32.
Another notable valuation metric for TLYS is its P/B ratio of 1.61. 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, SFIX has a P/B of 5.02.
These metrics, and several others, help TLYS earn a Value grade of A, while SFIX has been given a Value grade of D.
TLYS sticks out from SFIX in both our Zacks Rank and Style Scores models, so value investors will likely feel that TLYS is the better option right now.
Click to get this free report
Tilly's, Inc. (TLYS): Free Stock Analysis Report
Stitch Fix, Inc. (SFIX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.