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ZUMZ vs. GOOS: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors looking for stocks in the Retail - Apparel and Shoes sector might want to consider either Zumiez (ZUMZ) or Canada Goose (GOOS). 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, Zumiez has a Zacks Rank of #2 (Buy), while Canada Goose has a Zacks Rank of #5 (Strong Sell). This means that ZUMZ'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.

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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 6.76, while GOOS has a forward P/E of 19.84. We also note that ZUMZ has a PEG ratio of 0.56. 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. GOOS currently has a PEG ratio of 0.96.

Another notable valuation metric for ZUMZ is its P/B ratio of 0.96. 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, GOOS has a P/B of 5.65.

These are just a few of the metrics contributing to ZUMZ's Value grade of A and GOOS's Value grade of F.

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


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Zumiez Inc. (ZUMZ) : Free Stock Analysis Report
 
Canada Goose Holdings Inc. (GOOS) : Free Stock Analysis Report
 
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Zacks Investment Research