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HIBB or ULTA: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Hibbett Sports (HIBB) or Ulta Beauty (ULTA). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Hibbett Sports has a Zacks Rank of #2 (Buy), while Ulta Beauty has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that HIBB likely has seen a stronger improvement to its earnings outlook than ULTA has recently. 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.

HIBB currently has a forward P/E ratio of 10.27, while ULTA has a forward P/E of 20.52. We also note that HIBB has a PEG ratio of 0.94. 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. ULTA currently has a PEG ratio of 1.23.

Another notable valuation metric for HIBB is its P/B ratio of 1.18. 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, ULTA has a P/B of 7.85.

Based on these metrics and many more, HIBB holds a Value grade of A, while ULTA has a Value grade of C.

HIBB sticks out from ULTA in both our Zacks Rank and Style Scores models, so value investors will likely feel that HIBB is the better option right now.


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Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
 
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
 
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