Comparing American Eagle Outfitters and Boot Barn: Which Retail Stock Offers Better Value?

For those with an eye on the Retail - Apparel and Shoes sector, American Eagle Outfitters (AEO) and Boot Barn (BOOT) might be familiar names. Amidst such options, the question arises: which stock is a more attractive pick for investors seeking undervalued opportunities? It's time to delve into the details to make an informed decision.

Understanding Stock Valuation Metrics

Investors often have diverse strategies to pinpoint value in the stock market, yet one reliable approach involves combining strong Zacks Rank performance with favorable Style Scores in the Value category. These rankings benefit stocks featuring positive trends in earnings estimate revisions, while Style Scores bring to the fore companies with standout traits.

At present, AEO carries a Zacks Rank of #2 (Buy), outshining BOOT, which holds a Zacks Rank of #4 (Sell). This indicates that AEO's earnings estimates have seen a more notable upward revision, suggesting that its analyst outlook is on the upswing. However, this is merely a single aspect for those focused on value investing.

Key Value Indicators for Investors

In the realm of value investing, a plethora of traditional figures and metrics are analyzed to assess if a company's current share price reflects an undervaluation. Among these, the P/E ratio, P/S ratio, earnings yield, cash flow per share, and several other statistical factors are considered.

AEO features a forward P/E ratio of 14.59, compared to BOOT's P/E of 15.41. Moreover, the PEG ratio, which adjusts the P/E ratio to account for expected earnings growth, stands at 0.77 for AEO and is notably higher at 6.82 for BOOT.

The P/B ratio, comparing market value with book value, is another valuation metric where AEO has a ratio of 2.20 while BOOT's is 2.66.

When these metrics are considered together, they contribute to AEO's Value score of A and BOOT's Value score of C, painting a clearer picture of the investing landscape.

American Eagle vs Boot Barn: The Verdict

With its favorable earnings outlook and strong valuation scores, AEO stands out according to the Zacks Rank model. Taking into account the range of key valuation metrics, AEO currently appears to be the more appealing value option over BOOT.

evaluating, investing, retail