Investors looking for stocks in the Leisure and Recreation Products sector might want to consider either Academy Sports and Outdoors, Inc. (ASO) or Amer Sports, Inc. (AS). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
Right now, Academy Sports and Outdoors, Inc. is sporting a Zacks Rank of #2 (Buy), while Amer Sports, Inc. 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 ASO 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ASO currently has a forward P/E ratio of 7.31, while AS has a forward P/E of 29.23. We also note that ASO has a PEG ratio of 0.64. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AS currently has a PEG ratio of 1.24.
Another notable valuation metric for ASO is its P/B ratio of 1.44. 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, AS has a P/B of 2.91.
These metrics, and several others, help ASO earn a Value grade of A, while AS has been given a Value grade of D.
ASO 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 ASO is likely the superior value option right now.
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Academy Sports and Outdoors, Inc. (ASO): Free Stock Analysis Report
Amer Sports, Inc. (AS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).