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CAKE vs. CMG: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Cheesecake Factory (CAKE - Free Report) and Chipotle Mexican Grill (CMG - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Cheesecake Factory has a Zacks Rank of #2 (Buy), while Chipotle Mexican Grill 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 CAKE 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 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CAKE currently has a forward P/E ratio of 13.83, while CMG has a forward P/E of 42.26. We also note that CAKE has a PEG ratio of 1.40. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CMG currently has a PEG ratio of 2.09.
Another notable valuation metric for CAKE is its P/B ratio of 5.90. 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, CMG has a P/B of 20.25.
These are just a few of the metrics contributing to CAKE's Value grade of B and CMG's Value grade of F.
CAKE sticks out from CMG in both our Zacks Rank and Style Scores models, so value investors will likely feel that CAKE is the better option right now.
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CAKE vs. CMG: Which Stock Is the Better Value Option?
Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Cheesecake Factory (CAKE - Free Report) and Chipotle Mexican Grill (CMG - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Cheesecake Factory has a Zacks Rank of #2 (Buy), while Chipotle Mexican Grill 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 CAKE 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 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CAKE currently has a forward P/E ratio of 13.83, while CMG has a forward P/E of 42.26. We also note that CAKE has a PEG ratio of 1.40. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CMG currently has a PEG ratio of 2.09.
Another notable valuation metric for CAKE is its P/B ratio of 5.90. 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, CMG has a P/B of 20.25.
These are just a few of the metrics contributing to CAKE's Value grade of B and CMG's Value grade of F.
CAKE sticks out from CMG in both our Zacks Rank and Style Scores models, so value investors will likely feel that CAKE is the better option right now.