Yahoo Finance AEO vs. IDEXY: Which Stock Is the Better Value Option?
Investors interested in Retail - Apparel and Shoes stocks are likely familiar with American Eagle Outfitters (AEO) and Industria de Diseno Textil SA (IDEXY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, American Eagle Outfitters has a Zacks Rank of #1 (Strong Buy), while Industria de Diseno Textil SA has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AEO likely has seen a stronger improvement to its earnings outlook than IDEXY has recently. But this is just one factor that value investors are interested in.
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.
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.
AEO currently has a forward P/E ratio of 14.30, while IDEXY has a forward P/E of 23.75. We also note that AEO has a PEG ratio of 1.14. 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. IDEXY currently has a PEG ratio of 1.83.
Another notable valuation metric for AEO is its P/B ratio of 2.79. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IDEXY has a P/B of 8.71.
These are just a few of the metrics contributing to AEO's Value grade of A and IDEXY's Value grade of C.
AEO 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 AEO is likely the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
Industria de Diseno Textil SA (IDEXY) : Free Stock Analysis Report
