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RL vs. LULU: Which Stock Is the Better Value Option?
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Investors looking for stocks in the Textile - Apparel sector might want to consider either Ralph Lauren (RL - Free Report) or Lululemon (LULU - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, Ralph Lauren has a Zacks Rank of #2 (Buy), while Lululemon has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RL has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
RL currently has a forward P/E ratio of 18.06, while LULU has a forward P/E of 22.77. We also note that RL has a PEG ratio of 1.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LULU currently has a PEG ratio of 2.32.
Another notable valuation metric for RL is its P/B ratio of 5.36. 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, LULU has a P/B of 9.72.
These metrics, and several others, help RL earn a Value grade of B, while LULU has been given a Value grade of D.
RL stands above LULU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that RL is the superior value option right now.
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RL vs. LULU: Which Stock Is the Better Value Option?
Investors looking for stocks in the Textile - Apparel sector might want to consider either Ralph Lauren (RL - Free Report) or Lululemon (LULU - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, Ralph Lauren has a Zacks Rank of #2 (Buy), while Lululemon has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RL has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
RL currently has a forward P/E ratio of 18.06, while LULU has a forward P/E of 22.77. We also note that RL has a PEG ratio of 1.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LULU currently has a PEG ratio of 2.32.
Another notable valuation metric for RL is its P/B ratio of 5.36. 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, LULU has a P/B of 9.72.
These metrics, and several others, help RL earn a Value grade of B, while LULU has been given a Value grade of D.
RL stands above LULU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that RL is the superior value option right now.