ZUMZ or SFIX: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Retail - Apparel and Shoes sector might want to consider either Zumiez (ZUMZ) or 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Zumiez and Stitch Fix are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
ZUMZ currently has a forward P/E ratio of 12.90, while SFIX has a forward P/E of 125.82. We also note that ZUMZ has a PEG ratio of 0.96. 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 5.59.
Another notable valuation metric for ZUMZ is its P/B ratio of 1.52. 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, SFIX has a P/B of 7.78.
Based on these metrics and many more, ZUMZ holds a Value grade of A, while SFIX has a Value grade of D.
Both ZUMZ and SFIX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ZUMZ is the superior value option right now.
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Zumiez Inc. (ZUMZ): Free Stock Analysis Report
Stitch Fix, Inc. (SFIX): Free Stock Analysis Report
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