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ZUMZ or BOOT: Which Is the Better Value Stock Right Now?

Zacks Equity Research
Updated
Cohen & Steers (CNS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Zumiez (ZUMZ) and Boot Barn (BOOT). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Zumiez and Boot Barn are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

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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.

ZUMZ currently has a forward P/E ratio of 14.07, while BOOT has a forward P/E of 22.89. We also note that ZUMZ has a PEG ratio of 0.78. 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 1.11.

Another notable valuation metric for ZUMZ is its P/B ratio of 1.63. 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 2.96.

These metrics, and several others, help ZUMZ earn a Value grade of B, while BOOT has been given a Value grade of D.

Both ZUMZ and BOOT 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
 
Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report
 
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