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

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Investors looking for stocks in the Retail - Apparel and Shoes sector might want to consider either Zumiez (ZUMZ - Free Report) or Boot Barn (BOOT - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both Zumiez and Boot Barn have a Zacks Rank of # 1 (Strong Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ZUMZ currently has a forward P/E ratio of 14.21, while BOOT has a forward P/E of 21.66. We also note that ZUMZ has a PEG ratio of 1.18. 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. BOOT currently has a PEG ratio of 1.44.

Another notable valuation metric for ZUMZ is its P/B ratio of 1.95. 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, BOOT has a P/B of 3.73.

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 report >>

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