Yahoo Finance SKX or NKE: Which Is the Better Value Stock Right Now?
Investors interested in Shoes and Retail Apparel stocks are likely familiar with Skechers (SKX) and Nike (NKE). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Skechers has a Zacks Rank of #1 (Strong Buy), while Nike has a Zacks Rank of #5 (Strong Sell). 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. 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.
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.
SKX currently has a forward P/E ratio of 16.35, while NKE has a forward P/E of 22.91. We also note that SKX has a PEG ratio of 0.95. 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. NKE currently has a PEG ratio of 1.86.
Another notable valuation metric for SKX is its P/B ratio of 2.23. 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, NKE has a P/B of 7.59.
These are just a few of the metrics contributing to SKX's Value grade of B and NKE's Value grade of F.
SKX has seen stronger estimate revision activity and sports more attractive valuation metrics than NKE, so it seems like value investors will conclude that SKX is the superior option right now.
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Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
