Investors interested in Retail – Apparel and Shoes stocks are likely familiar with Boot Barn (BOOT) and Canada Goose (GOOS). But which of these two stocks presents investors with the better value opportunity right now? 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 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, Boot Barn has a Zacks Rank of #2 (Buy), while Canada Goose 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 BOOT is likely seeing its earnings outlook improve to a greater extent. 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.
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.
BOOT currently has a forward P/E ratio of 28.14, while GOOS has a forward P/E of 34.63. We also note that BOOT has a PEG ratio of 1.41. 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. GOOS currently has a PEG ratio of 3.88.
Another notable valuation metric for BOOT is its P/B ratio of 5.03. 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, GOOS has a P/B of 9.61.
Based on these metrics and many more, BOOT holds a Value grade of B, while GOOS has a Value grade of C.
BOOT is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BOOT is likely the superior value option right now.
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Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report
Canada Goose Holdings Inc. (GOOS) : Free Stock Analysis Report
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