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SKX or BIRK: Which Is the Better Value Stock Right Now?

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Investors with an interest in Shoes and Retail Apparel stocks have likely encountered both Skechers (SKX - Free Report) and Birkenstock (BIRK - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.

Skechers has a Zacks Rank of #1 (Strong Buy), while Birkenstock has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SKX has an improving earnings outlook. However, value investors will care about much more than just this.

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.

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.

SKX currently has a forward P/E ratio of 17.35, while BIRK has a forward P/E of 43.22. We also note that SKX has a PEG ratio of 1.23. 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. BIRK currently has a PEG ratio of 1.80.

Another notable valuation metric for SKX is its P/B ratio of 2.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BIRK has a P/B of 4.09.

These metrics, and several others, help SKX earn a Value grade of B, while BIRK has been given a Value grade of F.

SKX stands above BIRK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SKX is the superior value option right now.


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Skechers U.S.A., Inc. (SKX) - free report >>

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